THE People’s Bank of China (PBOC) says that it deeply regrets the designating of China as a “currency manipulator” by the United States Treasury Department, referring to the action as an act of unilateralism and protectionism.
In a statement, the central bank said the act severely broke international rules and will have a huge impact on the global economy and finance. This comes after the U.S. Treasury Department on Monday determined that China is manipulating its currency, due to the yuan falling against the U.S. dollar earlier on Monday, weakening beyond the key seven-per-U.S.-dollar level for the first time in more than a decade.
China’s yuan adopts the floating exchange rate system which is in line with the basics of market supply and demand and a regulating reference of a basket of currencies. The renminbi (RMB)’s exchange rate mechanism is based on market supply and demand, so the currency manipulation doesn’t exist.
The RMB’s value has been depreciating since the beginning of this month, which is the direct reflection of fluctuations in the global currency market.