Date
13 November 2018
The US Treasury Department noted that a recent depreciation of the Chinese yuan was likely to exacerbate the US trade deficit but US officials said Beijing appeared to be doing little to directly intervene in the currency’s value. Photo: AFP
The US Treasury Department noted that a recent depreciation of the Chinese yuan was likely to exacerbate the US trade deficit but US officials said Beijing appeared to be doing little to directly intervene in the currency’s value. Photo: AFP

US refrains from calling China a currency manipulator

The Trump administration refrained from naming China or any other trading partner as a currency manipulator as it leans on tariffs to try to cut a massive trade deficit with China, Reuters reports.

In its semi-annual currency report on Wednesday, the US Treasury Department said a recent depreciation of the Chinese yuan was likely to exacerbate the US trade deficit but US officials found Beijing appeared to be doing little to directly intervene in the currency’s value.

Since the Treasury’s last currency report was issued on April 13, the yuan has fallen by more than 9 percent against the US dollar. 

Last week, the currency had pushed closer to the key 7 to the dollar threshold, a level not breached since 2008. Some currency derivatives show market participants expect the yuan to weaken past that level within a year.

The Treasury noted reports that China was trying to counter some of the yuan depreciation and said China could bolster confidence in the yuan by engaging in more market-friendly reforms.

“Treasury is deeply disappointed that China continues to refrain from disclosing its foreign exchange intervention,” the department said in its report.

It added that China should advance macroeconomic reforms that support greater household consumption growth and help rebalance the economy away from investment.

The Treasury said it is keeping China, India, Japan, Germany, South Korea and Switzerland on a monitoring list for extra scrutiny.

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RC/CG

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