No Evidence China Manipulated Currency: IMF
There’s little evidence proving China’s central bank deliberately lowered the value of its currency, the International Monetary Fund said Tuesday, denouncing accusations made by the United States President Donald Trump.
According to a yearly economy report released by the organization Friday, the Chinese yuan has been “broadly stable” compared to other currencies, which suggests there’s been little to no intervention by the People’s Bank of China.
Experts continued to say a weaker yuan only benefitted international markets, providing a competitive price advantage over foreign competition.
On Monday, after days of deliberation and loud denouncements, the U.S. Treasury Department named China a currency manipulator — a first since 1994. The decision overturns a May ruling which voted to leave China off a blacklist after the yuan fell to its lowest value in 11 years.
Markets went into a tailspin last week after China's currency weakened beyond seven yuan per dollar, an occurrence that investors took as retaliation for President Trump’s announcement of more tariffs on Chinese imports.
However, according to a statement of the Bank of China, the reasons for the devaluation are the unilateral and protectionist sanctions, as well as the announcement of additional tariffs on Chinese goods made by Trump.
A delegation of Chinese officials is set to visit Washington next month to continue negotiations, despite the 12 previous failed rounds.
Investors fear the trade war between the world’s two biggest economies will cause a global recession. Bond markets have flashed red and a closely watched U.S. recession indicator reached its highest level since March 2007.
Trump has imposed US$250 billion in tariffs on Chinese imports and said Friday he would be “fine” if the talks got canceled once more.