KUALA LUMPUR – The United States (US) Department of the Treasury has taken Malaysia off its monitoring list of key trading partners whose currency practices and macroeconomic policies require close scrutiny.
In its November report to the US Congress, titled Macroeconomics and Foreign Exchange Policies of Major Trading Partners of the United States, the Treasury’s Office of International Affairs noted that Malaysia only met one criterion in both its June and November reports.
“When a major trading partner meets two of the three criteria outlined in the Trade Facilitation and Trade Enforcement Act of 2015 (2015 Act), that partner is placed on the monitoring list. Malaysia, therefore, has been removed from the monitoring list in this report,” it said, as quoted by Bernama
Malaysia’s removal from the US Treasury’s monitoring list marks a positive shift, indicating that the nation’s currency practices and macroeconomic policies no longer warrant heightened scrutiny by the US.
This development can boost investor confidence and improve Malaysia’s economic standing on the global stage.
Additionally, it may pave the way for more seamless trade relations with the US, as being on the monitoring list can sometimes imply concerns over trade fairness or currency manipulation.
The move acknowledges Malaysia’s efforts to align its economic practices with international benchmarks, reflecting positively on the government’s economic stewardship.
The 2015 Act mandates that the Treasury submit biannual reports on the macroeconomic and foreign exchange policies of major trading partners. It also requires an in-depth analysis for any partner that meets the three established criteria.
These criteria include maintaining a bilateral trade surplus with the US of at least US$15 billion (US$1 = RM4.48), a material current account surplus of at least 3.0 per cent of GDP, and persistent, one-sided currency intervention for at least eight months in a year, resulting in net purchases exceeding 2.0 per cent of an economy’s GDP over a 12-month period. – November 15, 2024