Singapore has been placed on a U.S. Department of the Treasury (DoT) 'watchlist' of nations that bear further scrutiny for its macroeconomic and foreign exchange policies.

According to a DoT press release on May 28 (May 29 Singapore time), the currency practices of nine countries required "close attention".

Nine countries on watchlist

The other countries joining Singapore on this list are:

• China
• Germany
• Ireland
• Italy
• Japan
• Korea
• Malaysia
• Vietnam

However, the DoT declined to list any country for "enhanced analysis", or to label any country a currency manipulator, including China.

According to CNBC, the DoT is required to make a report to Congress every six months on whether any countries are manipulating their currencies to obtain a trade advantage over the U.S.

In 2016, a law was passed that expanded the criteria the DoT used to make its assessment.

The number of countries in the list went from six in October, 2018 to nine in this current iteration.

According to the report, Singapore made a net foreign exchange purchase of about US$17 billion (S$23.45 billion) in 2018, said Bloomberg.

The report further stated that Singapore should undertake reforms to lower its high savings rate and boost low domestic consumption.

But according to Robert Kimmel, the head of the Department of Finance at NUS Business School, currency manipulation is a term that is often used inconsistently.

Writing for the Straits Times in 2017, he pointed out that Germany has been placed on the DoT's watchlist, even though it does not have its own currency to 'manipulate', and uses the Euro instead.

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