US concern on China currency stanceFriday 16 October 2009 07.08
The US has toughened its warning to China for the 'rigidity' of its currency, the yuan, and a rapid build-up of foreign exchange reserves. But the US Treasury, in a report to Congress, stopped short of branding China a currency manipulator.
The report said the rigidity of the Chinese currency and the reserves build-up were 'serious concerns which should be corrected to help ensure a stronger, more balanced global economy'.
The yuan, which has fallen by almost 7% against the US dollar since February, remains undervalued, the report said.
China's foreign exchange reserves ballooned to a record $2.27 trillion at the end of September, the Chinese central bank said on Wednesday.
The US Treasury made the charges in its bi-annual report to Congress under a law that requires it to determine whether any foreign economy manipulates its currency against the US dollar. The report said no major trading partner of the US met the standards for branding it a currency manipulator for gaining unfair competitive advantage in international trade.