U.S. Treasury FX Report 2026: No Major Trading Partner Found to Manipulate Currencies
SDG 8: Decent Work and Economic Growth | SDG 17: Partnerships for the Goals
Ministry of Finance | Reserve Bank of India (RBI)
The U.S. Department of the Treasury’s January 2026 report reviews macroeconomic conditions and foreign exchange policies of the 20 largest trading partners of the United States, covering the four quarters through June 2025, with more recent data included where available. These economies together account for about 78% of total U.S. trade in goods and services. The report is issued under the Omnibus Trade and Competitiveness Act of 1988 and the Trade Facilitation and Trade Enforcement Act of 2015.
Core Findings on Currency Practices
No major U.S. trading partner is found to have manipulated its currency for unfair competitive advantage under the 1988 Act during the review period.
No trading partner met all three criteria under the 2015 Act—
a significant bilateral trade surplus with the U.S.,
a material current account surplus, and
persistent, one-sided foreign exchange intervention.
As a result, no country is designated for enhanced analysis in this report cycle.
Monitoring List
Treasury maintains a Monitoring List for economies that meet two of the three 2015 Act criteria, or that otherwise warrant close scrutiny due to their size or external position. The January 2026 Monitoring List includes: China, Japan, Korea, Taiwan, Singapore, Thailand, Vietnam, Germany, Ireland, and Switzerland. Thailand is newly added relative to the June 2025 report; all others remain from prior reviews.
China: China stands out for limited transparency in exchange rate management, including the role of the daily fix and state-owned banks. Treasury flags China’s large and growing external surpluses and a substantially undervalued exchange rate, warranting continued monitoring.
Japan: Treasury notes that Japan, which historically intervened to resist appreciation, intervened in 2024 to counter sharp depreciation pressures on the yen, informing its assessment of intervention symmetry.
Vietnam: Vietnam remains on the Monitoring List due to a material current account surplus and a significant bilateral trade surplus with the United States. Treasury observes real effective exchange rate depreciation during the review period.
Thailand: Thailand is added to the Monitoring List, reflecting a material current account surplus and Treasury’s broader assessment of persistent global imbalances, not a finding of currency manipulation.
Germany: Germany remains on the Monitoring List because of its large and persistent current account surplus, which Treasury attributes to structural factors, including weak domestic demand and tight fiscal policy.
Ireland: Ireland continues on the Monitoring List due to its very large current account surplus, which Treasury links to structural features of the economy rather than foreign exchange intervention.
Policy Relevance
India is not on the U.S. Treasury’s Monitoring List and is not found to have engaged in currency manipulation. For Indian policymakers, this reinforces the space to manage exchange rate volatility within a market-determined framework without triggering bilateral currency consultations or trade-related escalation under U.S. law.
Why India Is Not Flagged
India meets only one of the three criteria under the 2015 Act: a $59 billion bilateral goods and services trade surplus with the United States.
India recorded a current account deficit of 0.5% of GDP, well below the 3% “material surplus” threshold.
Foreign Exchange Practices: Treasury estimates net foreign exchange sales of $79 billion (–2.0% of GDP) over the review period. India did not meet the persistence threshold for one-sided intervention.
Reserves Position: India’s foreign exchange reserves stood at around $591 billion as of end-June 2025 and Treasury assesses these reserves as ample by standard adequacy metrics.
Bottom Line: India remains outside enhanced scrutiny in the January 2026 review cycle. As global scrutiny of FX practices broadens to include swaps, forwards, and macroprudential tools, India’s treatment in this report highlights the value of transparency and moderation in external account management—particularly as trade surpluses with major partners continue to attract attention.
Follow the full news here: U.S. Treasury FX Report 2026