It seems likely that the release of the Treasury's FX report has been delayed, as Mnuchin wants more time to reach a determination on China.
That's shame. The most interesting questions the report needs to address don't actually involve China.
cfr.org/blog/anything-…
That's shame. The most interesting questions the report needs to address don't actually involve China.
cfr.org/blog/anything-…
The August designation of China basically required moving away from a mechanistic application of the 3 Bennet Amendment criteria.
But it isn't clear if the Treasury is ditching the three criteria altogether, or just for China ...
But it isn't clear if the Treasury is ditching the three criteria altogether, or just for China ...
Right now it often seems like the White House has one fx policy, and the Treasury another ...
When Trump talks of "manipulation" he isn't thinking about the Treasury report's 3 criteria. When the Treasury evaluates manipulation tho it generally has used those criteria ...
When Trump talks of "manipulation" he isn't thinking about the Treasury report's 3 criteria. When the Treasury evaluates manipulation tho it generally has used those criteria ...
To be clear, I personally would like to see the Treasury move away from the mechanical application of the three criteria --
a) I would de-emphasize the bilateral deficit criteria
b) I would broaden the definition of intervention to cover entities other than the central bank ...
a) I would de-emphasize the bilateral deficit criteria
b) I would broaden the definition of intervention to cover entities other than the central bank ...
But if Treasury sticks to the three criteria, I don't think anyone gets named --
a) Vietnam's current account surplus has dipped below 2% of its GDP
b) Thailand's intervention is under 2% of its GDP (at least through q2, might change soon)
a) Vietnam's current account surplus has dipped below 2% of its GDP
b) Thailand's intervention is under 2% of its GDP (at least through q2, might change soon)
c) Singapore gets off b/c the US runs a bilateral surplus with Singapore (it would meet the heavy intervention to keep a large surplus criteria)
d) Switzerland didn't intervene enough in the last 4qs of data (through q2) to cross the intervention threshold ...
d) Switzerland didn't intervene enough in the last 4qs of data (through q2) to cross the intervention threshold ...
and e) Taiwan gets off b/c its surplus with the US is still under $20b in the 4qs to q2 2019 (might change soon tho), and b/c the Treasury hasn't decided to make Taiwan's failure to disclose its forward/ swaps book into a major issue.
cfr.org/blog/130-billi…
cfr.org/blog/130-billi…
the interesting thing tho is that a lot of countries are getting off this time around (if the three criteria are applied mechanically) because they sold fx last fall. when the trade war heated up it pulled the CNY and a lot of other currencies down ...
With trade diversion pushing up the bilateral surpluses of many Asian economies and a truce, intervention has resumed in some key countries ...
So the April 2020 report could be interesting.
So the April 2020 report could be interesting.
"That's a shame" -- always the first tweet with the type-o
