The Trump administration is no longer designating China a currency manipulator as it gets ready to sign the first phase of a trade agreement with Beijing.
“China has made enforceable commitments to refrain from competitive devaluation and not target its exchange rate for competitive purposes,” a Treasury Department report to Congress said Monday.
But China will remain on the Treasury’s watch list of countries whose currency practices will be monitored. Others on the list include Germany, Japan, and Vietnam.
Monday’s decision comes five months after the U.S. formally branded China a currency manipulator — the first time any country was given that designation since U.S. President Bill Clinton’s administration designated China as such in 1994.
Currency manipulation occurs when a country artificially lowers the value of its money to make its goods and services cheaper on the world market, giving it an unfair advantage over its competitors.
China has always denied the practice.
Source: Voice of America