Central bank criticizes the label as ‘arbitrary’, inconsistent with US Treasury’s own criteria.
China did not and will not use exchange rates as a measure to cope with trade disputes, and the United States labeling the country as a “currency manipulator” is inconsistent with the quantitative criteria set by the US Treasury itself, the central bank said on Tuesday.
“The US labeling is an arbitrary unilateral and protectionist practice, which seriously damages international rules and will significantly impact the global economy and financial markets,” the People’s Bank of China said in a statement, expressing deep regret over the US Treasury’s decision.
The PBOC, the central bank, made the remark following Washington’s decision on Monday to label Beijing a currency manipulator.
US officials said they will engage with the International Monetary Fund to eliminate China’s “unfair competitive advantage”, the US Treasury said in a statement.
The yuan weakened beyond 7 per US dollar on Monday for the first time since May 2008. The onshore traded yuan had dropped 1.33 percent to 7.0352 per dollar at close.
On Tuesday, the onshore rate of the yuan reached 7.0699 per dollar in intraday trading, a 0.49 percent drop, before closing at 7.0321 per dollar.
© REUTERS / Jason Lee A U.S. dollar banknote featuring American founding father Benjamin Franklin and a China’s yuan banknote featuring late Chinese chairman Mao Zedong are seen among U.S. and Chinese flags in this illustration picture taken May 20, 2019
The renminbi’s depreciation since the beginning of August has been driven and determined by market forces and reflects shifts in market dynamics and volatilities in global foreign exchange markets amid global economic developments and escalating trade frictions, according to the central bank.
The renminbi exchange rate regime is a managed floating one based on market