China cleared of cur­rency ma­nip­u­la­tion

The Myanmar Times - - Business -

THE US Trea­sury has cleared China of keep­ing the yuan cheap for trade ad­van­tages, amid ac­cu­sa­tions by Repub­li­can pres­i­den­tial can­di­date Don­ald Trump that it ma­nip­u­lates the cur­rency.

In a semi-an­nual re­view man­dated by Congress over fears US trade rivals ma­nip­u­late their cur­ren­cies to boost ex­ports, the Trea­sury said that although the yuan had fallen in the past year, this de­cline was driven by mar­ket pres­sures.

In­deed, it said the yuan could have fallen more had Bei­jing not acted to pre­vent that.

“China’s in­ter­ven­tion in for­eign ex­change mar­kets has sought to pre­vent a rapid RMB de­pre­ci­a­tion that would have had neg­a­tive con­se­quences for the Chi­nese and global economies,” the Trea­sury said.

But it added that China needs to con­tinue loos­en­ing its ex­change rate poli­cies and be more trans­par­ent about the mar­ket.

“It is im­por­tant for China to con­tinue mar­ket-ori­ented ex­change rate re­form, al­low­ing for two-way flex­i­bil­ity of the RMB,” it said.

In his fight against Hil­lary Clin­ton for the White House, Mr Trump has re­peat­edly ac­cused China of keep­ing the yuan un­der­val­ued so as to pro­mote its ex­ports.

He has threat­ened to erect trade bar­ri­ers to Chi­nese prod­ucts if elected pres­i­dent, and his of­fi­cial pol­icy plat­form in­cludes in­struct­ing the Trea­sury to la­bel China a cur­rency ma­nip­u­la­tor, which would lead to trade sanc­tions. –

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