Why the US won’t label China a ‘currency manipulator’
Analysts say there’s a growing likelihood the two countries will coordinate on exchange rate policy, which will support the yuan
With the US Treasury promising it will not rush to label China a currency manipulator, analysts say there is a stronger chance the two largest economies in the world will cooperate on exchange rate policy, which may halt the yuan’s depreciation.
Although just last week US President Donald Trump called China the “grand champions” of currency manipulation, some analysts believe the comment was nothing more than his typical “bluster”.
Trump said in an interview with Reuters on Thursday that he had not “held back” in his assessment that China manipulated its currency.
“Well they, I think they’re grand champions at manipulation of currency. So I haven’t held back,” Trump said. “We’ll see what happens.”
The remarks came on the same day the new Treasury Secretary Steven Mnuchin said in two separate media interviews that no judgement on currency manipulation will be made until the April review, as part of the Treasury’s Congressional mandated report on the international economy and the foreign exchange market.
Mnuchin said he had had “very good conversations” with his Chinese counterparts and pledged a methodical approach to analysing the country’s currency practices, along with those of other major US trade partners.