China has out rightly rejected a U.S. decision to label it a currency manipulator, its central bank said on Tuesday.
Recall that the US Treasury had on Monday accused China of deliberately influencing its currency exchange rate against the US dollar to gain “unfair competitive advantage in international trade”.
The announcement by the US Treasury follows a sharp fall in the value of the Chinese yuan against the dollar. The drop caught markets off-guard as Beijing usually supports the currency.
Last week, China pledged to retaliate after US President Donald Trump vowed to impose 10% tariffs on $300bn (£246.7bn) of Chinese imports.
On Monday, the yuan passed the seven-per-dollar level for the first time since 2008, prompting Mr Trump to accuse China on Twitter of manipulating its currency.
A weaker yuan makes Chinese exports more competitive, or cheaper to buy with foreign currencies.
On Monday, the People’s Bank of China (PBOC) said the slump in the yuan was driven by “unilateralism and trade protectionism measures and the imposition of tariff increases on China”.
The move is largely symbolic because the US is already engaged in trade discussions with China and has implemented tariffs on the country’s imports.
Reacting to the accusations, China outrightly rejected a U.S. decision to label it a currency manipulator, its central bank said on Tuesday.
It added that Beijing has not used and will not use the yuan to cope with trade frictions with the world’s biggest economy.
Designating China as a currency manipulator seriously harms international rules, the People’s Bank of China (PBOC) said in the statement.