India does not see logic in US putting it on currency watchlist

Official says RBI follows a forex policy based on market forces

India does not see any logic in the United States putting it on a monitoring list of currency manipulators, a trade ministry official said yesterday.

“I don’t understand any economic logic,” Anup Wadhawan, India’s commerce secretary told reporters. The Reserve Bank of India is following a policy that allows currency movements based on market forces, he said. in the financial year 2020/21 that ended on March 31.

India’s bilateral trade surplus in goods with the United States totalled $24 billion in 2020, along with a services trade surplus of $8 billion, the US report said.

Indian authorities should limit foreign exchange intervention to “circumstances of disorderly market conditions, and refrain from excessive reserve accumulation,” the report said.

Some economists said the latest move by the United States may discourage the RBI from aggressive intervention in the foreign exchange market.