Currency manipulation: Washington puts Thailand under surveillance

The United States has added Thailand to its watchlist, but did not find any currency manipulators.

The US Treasury announced on Thursday, January 29, that it was strengthening its monitoring of countries' exchange rate practices, including their interventions to curb depreciation or appreciation of their currencies against the dollar.

He specified, however, that no major trading partner was accused of currency manipulation.

In its latest semiannual currency report, the US Treasury indicates that no major trading partner meets the three required criteria.

These criteria are used to trigger an in-depth analysis of monetary practices over the period from the second half of 2024 to the first six months of 2025.

The Treasury has added Thailand to its “watch list” of countries warranting particular attention due to the growth of this Asian country's global current account surplus and its trade surplus with the United States.

This addition brings to 10 the number of countries on the watchlist, with China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland, and Switzerland still on it.

The report has traditionally focused on whether countries are engaging in unilateral currency interventions or other manipulations to resist dollar appreciation in order to keep their exports at a lower level.

The US Treasury indicates that it is now more generally monitoring how economies are smoothing exchange rate movements.

It seeks in particular to determine whether these interventions are aimed at countering depreciation pressures with the same intensity as appreciation pressures.

No specific country targeted

Asked about the possibility that this change targets Japan more particularly, in a context of recent weakness of the yen, a US Treasury official responded that this was not the objective.

According to him, these adjustments do not seek to point to a particular country, but to facilitate the department's analysis during the periods covered by future reports, marked by a weakening of the dollar against major currencies.

The next report, scheduled for November, will cover the second half of 2025.

The official stated that the Treasury would particularly seek to determine whether countries' interventions to resist depreciation against the dollar are symmetrical with their efforts to resist appreciation, or less aggressive.

Japan is fighting against the weakness of the yen, with policymakers using calibrated communication to drive up the currency against the dollar without resorting to massive market intervention.

A source close to the matter told Reuters:

"Tokyo's efforts have received tacit support from US authorities after the New York Federal Reserve conducted dollar/yen rate checks last week, which is seen as a precursor to potential intervention."

But US Treasury Secretary Scott Bessent said on Wednesday that the United States was "absolutely not" intervening to support the yen.

The dollar index, which measures the value of the greenback against a basket of currencies, edged higher on Thursday for the second consecutive day after hitting its lowest level since February 2022 on Tuesday.

Other influences monitored

The US Treasury also indicated that, for countries on the watchlist, it would analyze the impact of other government policies on foreign exchange markets.

Notably, this includes capital controls, macroprudential measures, as well as the use of public investment vehicles or pension funds.

The Treasury will also study the use by countries of currency swaps to sterilize or offset spot interventions in order to minimize their impact on domestic monetary conditions, as well as the net forward positions of trading partners.

Traditionally, the three main criteria used by the Treasury to analyze currencies and determine whether there is manipulation are:

1. a trade surplus with the United States of at least $5 billion
2. a global current surplus greater than 3% of GDP
3. persistent and one-way net purchases of currencies reaching 2% of GDP

Countries that meet two of these criteria are automatically added to the list.

The Treasury did not label China a currency manipulator, thus avoiding a potential escalation of trade tensions with Beijing, despite what it called a "depreciation pressure" on the yuan.

But the department said that China "stands out among our major trading partners for its lack of transparency in exchange rate policies and practices," echoing its previous June 2025 report.

"This lack of transparency will not prevent the US Treasury from labeling China if the available evidence suggests that it intervenes through formal or informal channels to resist appreciation (of the yuan) in the future," the US Treasury said.

See also:

Thailand: the surge in gold propels the baht, but temporarily

The baht too strong threatens Thai tourism and exports

Thailand: crackdown on gray money and gold to stabilize the baht

Source: Thai PBS World