The United States has recognized the PRC as a currency-manipulating country and will work with the IMF to eliminate the “unfair advantage” China has gained by lowering the yuan against the dollar to a minimum since last December, the US Treasury said in a statement.
On Monday, the Central Bank of China, against the backdrop of the US decision to introduce new increased duties on Chinese goods, lowered the yuan to the dollar to a minimum since December last year – to 6.9225 per dollar.
“Minister of Finance Stephen Mnuchin, led by President Trump, today recognized China as the manipulator of the exchange rate. As a result of this decision, Minister Mnuchin will hold discussions with the International Monetary Fund to eliminate the unfair competitive advantage created by recent Chinese actions,” the document says.
It is noted that classifying the country as a currency manipulator is one of the duties of the head of the Ministry of Finance in accordance with the 1988 General Law on Foreign Trade and Competitiveness. In particular, the minister must assess whether there is a fact of manipulating the currency against the US dollar in order to prevent the adjustment of the balance of payments or obtaining an unfair competitive advantage in international trade.
“In recent days, China has taken a number of concrete steps to devalue its currency, while maintaining substantial foreign exchange reserves, despite the active use of such instruments in the past. The context of these actions and the implausibility of justifying the stability of the Chinese market confirm that the purpose of devaluing the Chinese currency is to obtain a dishonest competitive advantage in international trade, “the Ministry of Finance said in a statement.
According to the US agency, China violates the data under the G20 obligation to refrain from such devaluation.
“The Ministry of Finance continues to urge China to increase the transparency of the Chinese currency and the operations and reserves management objectives,” the document said.
The head of the People’s Bank of China, Yi Gang, said earlier that China is not going to make the yuan exchange rate a tool for responding to the US trade conflict, and the recent volatility of the Chinese currency is caused by external uncertainties.