The U.S. Treasury Department has declined labeling South Korea as a currency manipulator, but will keep the country on an associated watchlist.

In its latest semiannual report to Congress on Tuesday, South Korea, along with China, Japan and Germany, were included on a list of countries which are deemed to have currency practices that merit particular scrutiny.

Five new countries -- Ireland, Italy, Vietnam, Singapore and Malaysia -- joined the aforementioned countries on the watchlist for manipulation, while India and Switzerland were removed. 

To be labeled a currency manipulator by the U.S., a trading partner must demonstrate the following three conditions: a bilateral trade surplus of at least 20 billion dollars, a current account surplus of at least two percent of gross domestic product(GDP), and a so-called "persistent, one-sided intervention" where net purchases of foreign currency total at least two percent of GDP over a year.

South Korea satisfied only one of the three conditions according to the report as its current account surplus stood at four-point-seven percent of GDP last year, but trade surplus with the U.S. fell below 20 billion dollars. The department said that it would remove South Korea from its next report if current conditions hold.

Meanwhile, the department also declined to label China as a currency manipulator, despite public accusations by U.S. President Donald Trump to the contrary.

The non-designation avoids further escalating tensions between the two largest economies, which remain at an impasse after trade negotiations broke down earlier this month.