Arab Today, arab today us in waitandsee mode on chinas yuan devaluation
Last Updated : GMT 14:53:29
Arab Today, arab today
Arab Today, arab today

US in wait-and-see mode on China's yuan devaluation

Arab Today, arab today

Arab Today, arab today US in wait-and-see mode on China's yuan devaluation

china yuan
Washington - AFP

The United States warned China on Tuesday to push on with reforms to its exchange rate policy, saying it was too early to judge its devaluation of the yuan.

In the first reaction from Washington to the People's Bank of China's nearly 2.0 percent cut in the yuan versus the dollar, the US Treasury pressed for a more flexible exchange rate that reflects the market.

"While it is too early to judge the full implications of the change in the PBOC reference rate, China has indicated that the changes announced today are another step in its move to a more market-determined exchange rate," the Treasury said.

"Any reversal in reforms would be a troubling development."

US officials have long accused the Chinese government of keeping the currency, also known as the renminbi, undervalued to make Chinese exports cheaper and gain an unfair trade advantage.

The massive US goods trade deficit with China exceeded $31 billion in June. The sharp depreciation of the yuan Tuesday could widen that politically sensitive gap.

"China's move puts the US administration into an awkward and difficult contortion," said Eswar Prasad, a trade professor at Cornell University and a senior fellow at the Brookings Institution.

Prasad, a former International Monetary Fund official who once headed its China division, noted that a falling yuan and a rising bilateral US trade deficit with China will draw sharper criticism from Congress over China's currency policies.

"But the administration has no economic basis for criticizing China's move towards greater exchange rate flexibility. Indeed, preventing the yuan from depreciating further would run counter to US and IMF calls for a more market-determined exchange rate," he said.

Nicholas Lardy, a China expert at the Peterson Institute for International Economics, said it was "too soon to tell whether or not we could be entering into a period of sustained devaluation of the renminbi that would have a significant impact" on US exports to the country's second-largest trading partner.

Robert Kahn, of the Council on Foreign Relations, said the direct effects of the devaluation on US exports would be small.

"But if this is the start of a broader trend to trying devalue, then it would be problematic because it would be an attempt by China to gain a competitive advantage vis-a-vis its main trading partners," he said.

- Ammunition for critics -

The depreciation came as the US political season entered high gear in the run-up to the 2016 election.

"Beijing has handed critics new ammunition at the worst possible time: in the run-up to a presidential campaign," said Kevin Carmichael of the Centre for International Governance Innovation.

"Are they serious about this being a one-time move? Many will doubt that, especially in the Congress," Carmichael said.

Real-estate magnate Donald Trump, one of the 17 candidates in the Republican presidential nomination race, came out swinging shortly after the Chinese news.

"They're doing a big cut in the yuan, and that's going to be devastating for us," said the tycoon, a long-time critic of China's currency policy, in a CNN interview.

Experts generally appeared to agree that the devaluation at least was in part aimed at helping China's slowing economy, while some experts saw in it a Beijing lure to encourage the IMF to include the yuan in its reserve currency basket.

The IMF said last week that the yuan was not ready to be included along with the dollar, euro, yen and pound in its "special drawing rights" basket, its accounting currency.

Derek Scissors, at the American Enterprise Institute, said the devaluation was an attempt to have the renminbi behave as a normal currency.

"The People's Bank is trying to convince the IMF that the renminbi can be a reserve currency," he said.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today us in waitandsee mode on chinas yuan devaluation Arab Today, arab today us in waitandsee mode on chinas yuan devaluation

 



Arab Today, arab today
Arab Today, arab today Jordan airline suggests flyers 'talk'

GMT 11:59 2017 Friday ,24 March

Jordan airline suggests flyers 'talk'
Arab Today, arab today 5 Crafty Must-Have Limited-Budget Ideas

GMT 17:03 2017 Saturday ,25 March

5 Crafty Must-Have Limited-Budget Ideas
Arab Today, arab today Dozens dead in US-led Syria strikes

GMT 08:35 2017 Thursday ,23 March

Dozens dead in US-led Syria strikes
Arab Today, arab today Former head of Egypt’s syndicate submits appeal

GMT 20:11 2017 Saturday ,25 March

Former head of Egypt’s syndicate submits appeal
View News in Arabic - Business: أسواق مالية
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Yemen children dream of school

GMT 07:25 2017 Friday ,24 March

Yemen children dream of school
Arab Today, arab today MP submits a petition to dismiss university head

GMT 06:21 2017 Friday ,24 March

MP submits a petition to dismiss university head
Arab Today, arab today Salvage of South Korea's Sewol ferry

GMT 04:51 2017 Friday ,24 March

Salvage of South Korea's Sewol ferry
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Audi RS 5 Coupe acquires new design

GMT 13:22 2017 Thursday ,23 March

Audi RS 5 Coupe acquires new design
Arab Today, arab today Renault Trezor wins design award

GMT 11:56 2017 Tuesday ,21 March

Renault Trezor wins design award
Arab Today, arab today Actress Mervat Amin reveals her role in new series
Arab Today, arab today 2017 already marked

GMT 15:25 2017 Tuesday ,21 March

2017 already marked

GMT 06:04 2017 Thursday ,23 March

Haifa Wahby bets on her new drama show

GMT 22:00 2017 Thursday ,23 March

Number of unwedded girls amounts to 2.5m

GMT 18:57 2017 Tuesday ,21 March

Accessories designer reveals her new collection

GMT 10:34 2017 Tuesday ,21 March

Mexico threatens to ditch US corn imports

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures

GMT 20:03 2017 Saturday ,25 March

Health expert warns from dust sensitivity

GMT 07:36 2017 Wednesday ,22 March

US, Britain ban laptops on flights

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday