Speaking to the Financial Times, Treasury Secretary Steve Mnuchin mentioned that he would like to discuss currency devaluations by China as part of trade talks between the United States and the communist nation. Sam Fleming reports:
The US Treasury secretary has warned China not to engage in competitive devaluations of the renminbi as the two countries spar over their economic relations and engage in an escalating trade war.
Steven Mnuchin said in an interview with the Financial Times that the Treasury monitored currency issues “very carefully” and noted that the Chinese renminbi had fallen “significantly” during the year, adding that he wanted to discuss the currency with Beijing as part of trade talks.
He acknowledged there were several drivers behind the falls in the renminbi, including the country’s own economic issues.
“As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations,” he said ahead of meetings of the G20, IMF and World Bank in Bali, Indonesia.
The onshore renminbi has weakened by 10.9 per cent from its strongest point this year in late March to Rmb6.9213 per dollar. Investors and analysts have raised concerns that the currency is approaching Rmb7 against the greenback — an important psychological mark that would be its weakest level since 2008.
The currency has come under pressure this year as a result of the China-US trade war, a slowdown in Chinese economic growth and the broader emerging market sell-off exacerbated by the strengthening dollar.
“The renminbi has depreciated significantly during the year. There are various factors for that which we look forward to discussing with them,” said Mr Mnuchin. “One of those factors has to do with their own economic issues and what has gone on in the Chinese economy.
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