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US takes India off watchlist for currency practices

The US government has removed India from its currency monitoring watchlist. In its semi-annual foreign-exchange report to the Congress, the US Treasury Department did not mention India’s name in the watchlist of countries with potentially questionable foreign exchange policies.

India, along with China, Japan, Germany, Switzerland and South Korea, was placed in the bi-annual currency watch list in October last year.

The US, however, continued to keep China on its watchlist, while urging the Asian 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.

Designation as a currency manipulator comes with no immediate penalties but can rattle financial markets.

India and Switzerland were removed because for two consecutive reports they had both met only one of three criteria necessary for inclusion on the monitoring list.

While India had a significant bilateral surplus, Switzerland had a material current account surplus, according to the report.

India, along with China, Japan, Germany, Switzerland and South Korea, was placed in the bi-annual currency watch list in October last year.

he latest report removed India and Switzerland from the list but added Ireland, Italy, Malaysia, Singapore and Vietnam.

The US, however, continued to keep China on its watch list, while urging the Asian 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.

Currency policy has emerged as President Donald Trump’s latest tool to rewrite global trade rules that he says have hurt American businesses and consumers. He has made foreign-exchange policy a key piece of trade deals with Mexico, Canada and South Korea, and it’s expected to be part of an agreement with China, should one be reached.

The solutions or products would not be permitted to be tested in the regulatory sandbox if the applicant has no intention of deploying the FinTech solution in India on a broader scale after exiting from the sandbox, the regulator said.

Besides, the applicant must provide adequate disclosure of the potential risks to users participating in the sandbox and seek prior confirmation from such users that they fully understand and accept the attendant risks.

Upon approval by Sebi to participate in the sandbox, the participant must submit interim reports on the progress of the test.

The duration of the sandbox testing stage is proposed to be a maximum of nine months with a maximum extension (upon request) of three months.

After the completion of testing, Sebi shall decide whether to permit the product, process, service or solution to be introduced in the market on a wider scale.

The regulator has asked the public comments on the discussion paper latest by June 2019.

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