Exclusive: Treasury’s Mnuchin watching Chinese yuan weakness for manipulation

SAO PAULO (Reuters) – The United States is monitoring the recent weakness in China’s yuan currency and will review whether the currency has been manipulated, U.S. Treasury Secretary Steven Mnuchin told Reuters on FridayMnuchin said in an interview in Sao Paulo, Brazil, that the yuan’s weakness would be reviewed as part of the U.S. Treasury’s semi-annual report on currency manipulation. That is due on Oct. 15 and will be based on activity for the first six months of 2018. U.S. Treasury Secretary Steven Mnuchin talks during an interview with Reuters in Sao Paulo, Brazil, Brazil July 20, 2018. REUTERS/Nacho DoceAsked whether he was concerned that China may be using its currency as a weapon in an escalating trade fight with the United States, Mnuchin said: “I’m not saying whether it’s a weapon or not a weapon. There’s no question that the weakening of the currency creates an unfair advantage for them.” “We’re going to very carefully review whether they have manipulated the currency.” Mnuchin’s comments came just after President Donald Trump accused China and the European Union of manipulating their currencies in a tweet on Friday, adding that this is “taking away our big competitive edge.” Trump also repeated his complaints that Fed interest rate hikes were causing the dollar to rise and said he was ready to impose U.S. tariffs on all $500 billion of imported goods from China. China’s yuan, battered by the trade brawl, has lost 7.5 percent of its value since the end of the first quarter to a year low of 6.767 to the dollar, marking its biggest 90-day drop since yuan exchange rates were unified in 1994.. The Treasury under Trump has thus far refrained from declaring China a currency manipulator, despite Trump’s campaign promise to do so as soon as he took office. This is partly because the yuan had been rising or stable until earlier this year. Reporting by David Lawder; Editing by Ross ColvinOur Standards:The Thomson Reuters Trust Principles.

Source: Reuters

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