當年今日
關於我們

Chinese renminbi stays on US currency manipulation watchlist

蘋果日報 2020/12/18 06:48


The United States Treasury has kept China as a potential currency manipulator on a monitor list in its latest foreign exchange report, while naming Vietnam and Switzerland as new manipulators with problematic monetary practices.
The news strengthened the Chinese renminbi on Thursday, with the spot market closing at 6.5335, up 43 basis points and exceeding its one-week high. Analysts suggest the outgoing U.S. administration of Donald Trump has backtracked from his previous tactic of using currency as a weapon in negotiations with Beijing over trade disputes.
“In the eyes of Trump, this may not be the most effective or the most suitable approach, so he quickly rescinded” the policy, said Kevin Tsui, associate professor of economics at Clemson University.
Trump was giving himself more flexibility in maneuvering over his own political future by pausing a currency war, which would have hurt the interests of American businesses, said Simon Lee, a senior lecturer at the Chinese University of Hong Kong’s business school.
Instead, his administration had singled out individual Chinese companies to sanction in a more targeted approach.
The Treasury labeled the renminbi as a manipulated currency in August 2019, at the peak of trade tensions between Washington and Beijing. It then removed the listing in January prior to the signing of a partial trade deal between the two nations.
In its half-yearly report, the Treasury urged Beijing to improve transparency in its exchange rate management and increase public understanding of the relationship between the country’s central bank, People’s Bank of China, and the forex activities of state-owned banks.
It also added India, Taiwan and Thailand to its monitoring list because of currency practices that might give them a competitive edge in trading with the Americans.
As part of his presidential manifesto to “Make America Great Again,” Trump has wanted to weaken the U.S. dollar to help American products become more competitive. The COVID-19 pandemic seemed to have done the job for him, as continued monetary easing prompted the U.S. Dollar Index to drop in the past few months by some 12% to 90.114 from the recent peak of 103. The M2 money supply also increased by 22.5% from March to November.
According to current U.S. policy, a trading partner is branded as a manipulator if it records a bilateral trade surplus of at least US$20 billion, intervenes in its currency to an extent that exceeds 2% of gross domestic product, or registers a global current account surplus of beyond 2% of GDP.
Treasury Secretary Steve Mnuchin in July indicated a possibility of broadening the scope of considerations, potentially making it easier for a country to be named a currency manipulator.
Click here for Chinese version
---------------------------------
Apple Daily’s all-new English Edition is now available on the mobile app: bit.ly/2yMMfQE
To download the latest version,
Or search Appledaily in App Store or Google Play