The People’s Bank of China (PBOC) says that the US Treasury’s recent categorisation of China as a currency manipulator serves to “ruin the international financial order.”
In an official statement PBOC said that the US Treasury’s labelling of China as a currency manipulator “does not satisfy the quantitative standards that the US Treasury itself has formulated for so-called ‘currency manipulator nations.'”
“[This] is wilful unilateral and protectionist conduct that severely ruins international rules, and will have a major impact upon the global economy and finance,” said the statement.
“The US’s disregard for facts and irrational labelling of China as a ‘currency manipulator’ is conduct which is harmful both to itself and others, and China firmly opposes this.
“It not only severely ruins the international financial order, triggering financial market turmoil, it also greatly impedes the recovery of international trade and the global economy.
“China implores the US to rein in its horses, and return to the correct path of reason and objectivity.”
According to PBOC in actuality China currently runs “a managed, floating exchange rate system that has market supply and demand as its foundation, and makes reference to a basket of currencies for performing adjustments.
“In terms of mechanisms the renminbi exchange rate is determined by market supply and demand, and there are no ‘currency manipulator’ issues.
“Since August of this year the renminbi exchange rate has seen significant depreciation, which is mainly a reflection of market supply and demand and international forex market volatility against a background of global economic changes and trade frictions, and is driven and determined by market forces.
“PBOC has always strived to maintain the fundamental stability of the renminbi exchange rate at a rationally balanced level.
“According to data from the Bank for International Settlements, from the start of 2005 until June 2019 the renminbi’s nominal effective exchange rate has risen by 38% and its real effective exchange rate has risen 47%.
“It is the currency with the strongest momentum out of G20 economies, and is one of the world’s top currencies in terms of appreciation.”