China’s handling of yuan backed by IMF despite Donald Trump’s repeated charges of currency manipulation
- International Monetary Fund says Beijing’s handling of the Chinese yuan in 2018 was ‘broadly in line’ with the state of its economy
- US President Donald Trump said at the start of July that the United States manipulate the value of the US dollar to offset competitive devaluation by China
Despite repeated accusations of currency manipulation from US President Donald Trump, the International Monetary Fund has found that in 2018, Beijing’s handling of the Chinese yuan was “broadly in line” with the state of its economy.
The Washington-based fund, which is bracing for the departure of managing director Christine Lagarde in September, also lashed out at the impact of the US-China trade war, which is “weighing on global trade and investment, without materially affecting [trade] imbalances thus far”, in a new report released on Wednesday.
The report estimated that “the announced and envisaged tariffs could reduce global growth by an additional 0.3 per cent in 2020”, as the trade war moves into its second year.
However, on currency, the International Monetary Fund (IMF) found that including its current account surplus and exchange rate, China’s external position had improved compared to previous years’ assessments that it was “moderately stronger” than warranted.
“After many years of excess current account surpluses, China’s external position moved to become more broadly in line with fundamentals in 2018,” said IMF chief economist Gita Gopinath.