There is “no evidence” Chinese authorities have been intervening to move the exchange rate of the yuan, a senior International Monetary Fund (IMF) official said Tuesday. The comments by IMF chief economist Maury Obstfeld came after US President Donald Trump accused China and the European Union of keeping their currencies artificially weak to make their exports more competitive.
Even though there have been some currency movements recently, “there is no evidence of manipulation”, Obstfeld said. The IMF official noted in an interview on CNBC that a recent US Treasury report that looks at currency manipulation “came to the same conclusion”.
“They haven’t been intervening in their foreign exchange market as far as we can see,” he said.
Other factors in the Chinese economy are putting pressure on the currency, he said, including lower growth, lower interest rates “and threats of tariffs against China.”
In its twice-yearly report to Congress in April that looks for official currency manipulation, the US Treasury said “the Chinese currency generally moved against the dollar in a direction that should” help reduce China’s trade surplus with the United States.
However, China was included on the US Treasury’s currency watch list because “it constitutes a disproportionate share of the overall US trade deficit”, the report said.
Germany also remained on the watch list because it “has the world’s largest current account surplus” and has made “little to no progress in reducing this massive surplus the past three years”.
Obstfeld earlier released an IMF report saying the excess trade surpluses and deficits in key economies like Germany and China could exacerbate growing trade tensions.
And he told reporters there is “more they could be doing” to lower their surpluses.
But he again urged countries to avoid protectionist measures and not to focus on bilateral deficits — something that has been at the centre of Trump’s criticism of US trading partners.