Washington, DC, United States (4E) – The U.S. Treasury Department stopped short of naming China as a currency manipulator, but said that the value of the Chinese currency, yuan, is still undervalued.
In the agency’s semiannual report to Congress on Monday, it is stated that China’s currency continues to be “significantly undervalued,” and that the country still needs to do a lot in making the yuan appreciate against the dollar and other major currencies.
In a statement that accompanied its report, the Treasury praised the Chinese government for its substantial reduction in the intervention in currency-exchange markets since the third quarter last year. Since June 2010, the yuan has strengthened by 9.3 per cent in nominal terms against the greenback and 12.6 per cent in real terms.
President Barack Obama has said that the Chinese currency’s rise against the dollar was due to the pressure applied by his administration.
The Treasury also cited China’s efforts to liberalize controls on movement of capital in a move to create a more flexible exchange-rate system. Since tagging China in 1994, the U.S. has not designated any other nation since.
American manufacturers complain that the yuan is artificially kept low to make the cost of Chinese exports cheaper in the U.S.
Mitt Romney, who lost to Obama in the recent presidential election, had said he would name China as a currency manipulator if he was elected.