China’s central bank said Tuesday it “deeply regrets” that the United States has officially named Beijing as a “currency manipulator.”
The US Treasury Department took the step on Monday after China allowed a sharp fall in the value of the yuan against the dollar. The move is largely symbolic as it normally prompts negotiations and opens the door for tariffs – measures the US has already taken.
Washington claims Beijing is trying to gain a competitive advantage as the world’s two biggest economies remain locked in a trade war. A weaker yuan makes Chinese exports cheaper, providing a boost to the country’s cooling economy.
The People’s Bank of China (PBOC) said in a statement the designation is another form of “protectionist behaviour” by the Trump administration and warned that it “will have a major impact on global economic finance.”
The Chinese government allowed the yuan to fall below the 7 to the dollar mark for the first time in a decade on Monday, days after Beijing warned that it would retaliate over new tariffs announced last week by US President Donald Trump.
The move worried analysts, who have previously seen the 7 to the dollar mark as a “red line” for the central bank, which keeps close tabs on the nation’s currency.
The People’s Bank of China said the weakening of its currency was in response to “unilateralism and trade protectionism measures,” but stressed that the rising and falling of currencies was normal.
“China has not used the exchange rate as a tool to deal with trade disputes,” the central bank said on Tuesday.