The Economist | Aug 6th, 2019
Category: Financial News
On August 5th the Trump administration deployed another weapon in its fight with China: name-calling. After some grousing on President Donald Trump’s twitter feed, the Treasury officially designated China a currency manipulator. The Chinese government stands accused of devaluing its currency in order to gain an unfair advantage in international trade. It is the first time the Treasury has made such an accusation in over 25 years.
What motivated the Trump administration’s claim was that the Chinese yuan has been falling in value against the dollar, and on August 5th dropped past the psychologically significant value of seven to the dollar for the first time in over a decade. The People’s Bank of China (PBOC) also tends to keep a close eye on its value, intervening on occasion to lean against the wind of market pressure.