US Treasury Secretary Steven Mnuchin warned China in a Financial Times interview on currency manipulation. He said that “as we look at trade issues, there is no question that we want to make sure China is not doing competitive devaluations.” Nonetheless, Mnuchin also acknowledged that Chinese Yuan “depreciated significantly” due to “various factors”. He added “one of those factors has to do with their own economic issues and what has gone on in the Chinese economy.”
Earlier this week, Bloomberg reported that Mnuchin faced pressure from within the White House to formally designate China as currency manipulator. The Treasury Department is expected to release its semiannual currency report later this month. And we’ll see Mnuchin’s eventual stance then.
There are clear rules for the Treasury to decide whether a country is manipulating its currency. Rules aside, as we argued in our report, China has been clearly intervening in the markets to “halt” or “slow” the sharp decline of the Yuan exchange rate. It’s clearly seen by almost everyone sensible in Asia that the Yuan and Chinese stocks are in deep trouble facing the risks of trade war escalations.
And it’s unknown why part of the US administration continued to lie about intention devaluation by China on the Yuan. Though, we wouldn’t mind the US just face the facts by naming China as currency manipulator and requests it stopping to support the Yuan exchange rate.
