After being put in currency monitoring list in 2018, foreign investors pulled their money from India.
The Trump administration has removed India from its currency monitoring list of major trading partners. Now, American investors can invest more in India. Moreover, the fall of the Indian currency rupee against the dollar is expected to be ceased. It is good news for the newly elected Modi government that enters its second consecutive term this month. Narendra Modi is going to take oath tomorrow as the PM.
It is worth mentioning that after being put in the currency monitoring list last year, the foreign investors pulled their money from India during the first six months. The value of rupee depreciated 7 per cent against the dollar. The foreign, particularly American investors decide to invest in any country according to this list. This list decides investment in under scanning countries is how much risky or beneficial.
The United States said that some of its major concerns are addressed by India. Switzerland is the other nation that has been removed by the US from its currency monitoring list. But China, Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia, and Vietnam are still on this list.
India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in May 2018 along with five other countries China, Germany, Japan, South Korea, and Switzerland. In its next report in October 2018, the Treasury had said that India has made improvements and its name would be removed from the currency manipulation list in the next report. India maintains ample reserves according to the IMF metrics for reserve adequacy, it said.
However, the US continued to keep China on its watchlist, while urging the communist nation to take necessary steps to avoid a persistently weak currency. “Treasury continues to urge China to take the necessary steps to avoid a persistently weak currency,” said US Treasury Secretary Steven Mnuchin in a statement.