China central bank to Trump: you’re just wrong about currency manipulation

China is not manipulating its currency and will not use it as a trade weapon against America, a senior Chinese central bank official said on Tuesday, directly refuting US President Donald Trump’s allegation on Monday that Beijing is deliberately devaluing the yuan to gain an advantage.

Li Bo, the director of the monetary policy department within the People’s Bank of China, told a briefing in Beijing that the exchange rate of the yuan, also known as the renminbi, is now decided by market demand and supply.

“We’d like to stress that [the exchange rate] is market-driven. We won’t use policy to devalue the yuan and we won’t use the exchange rate as a weapon to react to external pressures from trade conflicts,” Li said.

While Li did not name Trump directly, his comments came a day after the US president charged in an interview with Reuters that China is manipulating its currency to offset the effects of the trade tariffs imposed by Washington. It was Trump’s latest in a string of accusations that Beijing is not playing fair with the exchange rate.

Trump complained repeatedly about the yuan during the 2016 presidential election campaign, promising to formally label China a currency manipulator if he was elected. However, he toned down his rhetoric after he assumed office, and Trump’s Treasury has never formally referred to China as a manipulator in its semi-annual currency reports to Congress.