U.S. Warns China its Currency is still Undervalued
April 16, 2014 2:16 PM EST
The Obama administration on Tuesday warned Beijing that it is concerned about the recent drop in China's currency, calling it "significantly undervalued" and saying it is watching the value of the yuan closely.
A man sits in front of the headquarters of the People's Bank of China. (Reuters)
"Recent developments in the ... exchange rate would raise particularly serious concerns if they presage renewed resistance to currency appreciation and a retreat from China's announced policy of reducing intervention and allowing the exchange rate to reflect market forces," the Treasury said.
The report noted that China's yuan -- also known as the renminbi or RMB -- rose in value last year, but it said the increase was too slow and did not go far enough. "Factors indicate a RMB exchange rate that remains significantly undervalued," it said.
Many U.S. lawmakers and businesses have long complained that China deliberately undervalues the yuan to gain an edge in international markets.
Echoing other recent statements, the Treasury welcomed a widening in the trading band that Beijing sets for the yuan, saying it presented an opportunity for markets to play a bigger role in determining the value of the currency, which Beijing has long kept on a tight leash.
The turn lower in the yuan this year, however, drew particular scrutiny in the report.
"China has continued large-scale purchases of foreign exchange in the first quarter of this year, despite having accumulated $3.8 trillion in reserves, which are excessive by any measure," it said. "This suggests continued actions to impede market determination."
The Treasury said the yuan has seen periods of depreciation before, but added: "The pace and the size of the recent decline was unprecedented."
Most Popular Slideshows
- Dwyane Wade, Joe Johnson, Amare Stoudemire Among Worst Contracts In The NBA (Part 2 - Eastern Conference)
- Brawl-Marred Game in NFL Week 3: Philadelphia Eagles 37, Washington Redskins 34 [PHOTOS]
- NFL Monday Night Football Recap: Chicago Bears 27, New York Jets 19
- Reasons Why Michael Jordan Is Better Than LeBron James [PHOTOS And VIDEO]
Join the Conversation
- Pope Francis To Simplify Annulments In Catholic Church
- Ebola Update: US CDC Expects More Cases By End Of Jan 2015, Advises Airlines To ‘Treat All Body Fluids As Infectious'
- Roubini Global Economics Forecasts 20% Decline In Value Of Aussie Dollar, Economic Slowdown
- B.C. Teachers Strike: Public Classes for Half a Billion Kids Finally Start
- Nexus 6, 8 Release Date is Halloween 2014 as Android L Intro Set for October 16
- New Samsung Galaxy Note 4 and Galaxy S5 Android 5.0 L Killer Features, Encryption and More
- Moto G 2014 v Asus Zenfone 5 – Specification Comparison Shows Zenfone 5 Is A Good Alternative for Moto G
- Android 5.0 L Nexus 4, Nexus 5, Nexus 7 Release in October, Google Employees Offer Hint
- U.S and Canada Fighter Jets Chase Out Russian Jets Near Alaska: Air Space Violation Not Confirmed
- Apple iPad Air 2, OS X Yosemite Release Date Set For October, While iPad Mini 3 With Retina Headed For 2015 Release
- Microsoft Doubles OneDrive Space To 30GB Due To iOS 8 Update Issues