The United States’ labeling of China as a currency manipulator is unlike
上海419论坛ly to compel the International Monetary Fund to intervene, as it concluded recently that Chi
na’s currency practices are in line with its economic fundamentals, according to experts.
On Monday, the US Treasury, following an earlier pronouncement by US President D上海419论坛品茶微信
onald Trump, applied the label to China after the yuan depreciated, escalating the US-China trade friction.
The yuan now trades at about 7-to-1 against the dollar. That’s in line with China’s econo
上海419论坛mic fundamentals, and the IMF is therefore unlikely to impose sanctions on Beijing, according to Gary Huf
bauer, a senior fellow at the Peterson Institute for International Economics in Washington.
Hufbauer said that Trump believes the People’s Bank of China (PBOC) engaged in currency manipulation because it fail上海419论坛品茶微信
ed to support the yuan despite ample cash reserves, apparently creating a new standard overnight.
“The IMF defines currency manipulation as deliberate intervention to weaken a curren上海419论坛
cy in support of larger exports,” he told China Daily. “China’s yuan was weakened by market forces in response t
上海419论坛品茶微信o Trump’s latest tariff threat－and there’s nothing deliberate about China’s action.”
The IMF defines currency manipulation in Article IV of its rules and requires a vote by its execu
tive board. The US has its own standards, defined in a 1988 law, expanded by former president Barack O上海419论坛
bama as part of the Trans-Pacific Partnership negotiations, and codified in 2015.
“Trump’s declaration is not consistent with any of the previously announced standards,” Hufbauer said
上海419论坛品茶微信 “Trump is toying with the idea of countervailing currency intervention－selling dollars to bu
y yuan－but that seems unlikely. The Fed is not likely to go along, and the Exchange Stabilization Fund controlled
by the Treasury does not have the big bucks needed to move currency markets.”