Nine countries on the list were included in the department’s previous report, with Thailand being newly added
US$100 bills. (ClipartKorea)
The US Department of the Treasury kept South Korea on its currency monitoring list in a new report released Thursday.
Korea was taken off the list in November 2023 for the first time since April 2016. It was redesignated for monitoring in November 2024 and has remained on the list since.
The US Treasury listed 10 countries, including South Korea, China, Japan, Taiwan, Thailand, Singapore, Vietnam, Germany, Ireland and Switzerland, on its monitoring list in its latest report. Aside from Thailand, the other nine countries were included in the department’s previous report.
Based on data covering four quarters from July 2024 to June 2025, Thursday’s report offered a comprehensive evaluation of the exchange rate policies and macroeconomic management of the US and its major trading partners.
Pursuant to the Trade Facilitation and Trade Enforcement Act of 2015, the US uses three criteria to judge whether a country should be designated on the currency monitoring list or as a currency manipulator: a trade surplus with the US of US$15 billion or more, a current account surplus exceeding to 3% of its gross domestic product (GDP), and net purchases of dollars for at least eight out of 12 months.
If a country meets two of the criteria, it is designated as a country to be monitored; if it meets all three, it is considered a currency manipulator. As none of the US’ major trading partners fulfilled all three criteria, no country was labeled as a currency manipulator. South Korea failed to meet the third criterion as it made net sales, instead of net purchases, of dollars (-0.4%).
The US Treasury also stated that it would increase its vigilance on factors that may influence foreign exchange markets. Instead of only focusing on the interventions of central banks, it will now scrutinize how government investment vehicles, such as sovereign wealth funds or government pension funds, may influence foreign exchange markets.
In its section dedicated to South Korea, the report delved into the details of the influence the swap line between the National Pension Service (NPS) and the Bank of Korea (BOK) had on the foreign exchange market. The report noted that the increase in the BOK’s forward book may have reflected the activation of a swap line between the NPS and the BOK, which in turn may have contributed to resisting depreciation pressures. Under this swap line, the BOK meets the dollar demand of the NPS, preventing the depreciation of the won in the foreign exchange market.
The US Treasury, once again, did not designate China as a currency manipulator, but strongly condemned China’s lack of transparency around its exchange rate policies.
“China stands out among our major trading partners in its lack of transparency around its exchange rate policies and practices,” the Treasury noted, adding that it was open to designating China as a currency manipulator if “available evidence suggests that it is intervening through formal or informal channels to resist RMB appreciation in the future.”
By Kim Won-chul, Washington correspondent
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