Chinese Currency Value Continues to Rise, Says Treasury in Report
The Treasury Department again chose to not label China or any other country a currency manipulator as part of its semiannual report to Congress on exchange rate policies. Some pressure has built over recent days and weeks to call out both China and Japan on currency values and manipulation (see 14101004). Treasury said China is making strides in allowing its currency to reflect market forces, even though the yuan, also known as the renminbi (RMB), is still severely undervalued. Between mid-February and late April, the RMB depreciated by 3.1 percent. Since late April, it has partially recovered, appreciating by 1.9 percent,” said the report. “On balance, in the first nine and a half months of 2014, the RMB has depreciated by 1.4 percent against the dollar after strengthening by 2.9 percent in 2013.”
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Japan has not intervened in foreign currency markets since 2011, but it is still struggling to resurrect its economy, Treasury added. “As Japan takes policy steps to bring about a durable recovery and escape deflation, it is imperative both for the success of those measures and for the global economy that Japan’s economic policies work primarily through an increase in domestic demand.”