World

US Treasury drops China's currency manipulator label

WASHINGTON The US Treasury Department on Monday dropped its designation of China as a currency manipulator days before top officials of the world's two largest economies were due to sign a preliminary trade agreement to ease an 18-month-old tariff war.

The widely expected decision came in a long-delayed semi-annual currency report, reversing an unexpected move by Treasury Secretary Steven Mnuchin last August at the height of US-China trade tensions.

Mr Mnuchin had accused China of deliberately holding down the value of its yuan currency to create an unfair trade advantage, just hours after President Donald Trump, angered at the lack of progress in trade negotiations, had also accused China of manipulating its currency.

The Treasury Department had not labelled China a currency manipulator since 1994.

Beijing had recently met just one of the department's three criteria needed for such a designation - a large bilateral trade surplus with the US.

In its latest currency report, the Treasury said that as part of the phase one trade deal, China had made "enforceable commitments to refrain from competitive devaluation" and agreed to publish relevant data on exchange rates and external balances.

Chinese Vice Premier Liu He arrived in Washington on Monday for a White House ceremony to sign the trade deal with Mr Trump.

People familiar with the negotiations said that although the manipulator designation had no real consequences for Beijing, its removal was an important symbol of goodwill for Chinese officials.

ALMOST COMPLETED

US Trade Representative Robert Lighthizer on Monday told Fox Business the translation of the US-China trade agreement was almost completed and the text of the deal would be made public today before the ceremony.

The currency report said the Chinese yuan, also known as the renminbi, had depreciated as far as 7.18 per US dollar in early September last year, but had rebounded in October and was currently trading at about 6.93 per dollar. - REUTERS

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