Yuan sinks further after U.S. currency report
BEIJING — China’s politically sensitive yuan sank to a 22-month low against the dollar Thursday after the U.S. Treasury declined to label Beijing a currency manipulator amid a mounting tariff battle.
The yuan fell to 6.9 per dollar, coming its closest to breaking the symbolically significant level of seven to the greenback since December 2016. The yuan, also known as the
or “people’s money,” has declined by almost 10 percent against the dollar since April as China’s economic growth cooled and U.S. and Chinese interest rates went in opposite directions.
That helps Chinese exporters cope with tariffs of up to 25 percent imposed by President Donald Trump in a fight over Beijing’s technology policy.
But it raises the risk of inflaming American complaints trade tactics.
Chinese officials have promised avoid “competitive devaluation” about Beijing’s
to to boost exports. Central bank governor Yi Gang repeated that pledge last weekend at a finance conference in Indonesia. But they have not said how far the yuan might be allowed to fall in response to market forces.
On Wednesday, the U.S. Treasury’s bi-annual report on currency policy said China failed to meet criteria to be labeled a currency manipulator, a status that can trigger sanctions. But it said Beijing was, along with Japan and Germany, on a list of governments whose currency polices would be closely monitored.
China’s foreign ministry welcomed the report and said it reflected “common sense and the consensus of the international community.”
Zuo Xiaolei, a former chief economist for Galaxy Securities in Beijing, noted some other developing country currencies have declined by 20 percent or more in the same time.