US expects more transparency from China on exchange rate policy

22 Jun '24

1 min read

US expects more transparency from China on exchange rate policy

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Insights

No major trading partner manipulated the exchange rate between its currency and the US dollar for preventing effective balance of payments adjustments or gaining unfair competitive advantage in global trade in 2023, a report by the US department of the treasury said.
It reiterated the department's call for more transparency from China on exchange rate policy.

No major trading partner manipulated the rate of exchange between its currency and the US dollar for preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade last year, according to the department of the treasury’s semi-annual report to Congress on macroeconomic and foreign exchange policies of major trading partners.

Most interventions by major US trading partners continue to be in the form of selling dollars, actions that strengthen their currency and weaken the dollar.

The report reviewed and assessed the policies of major trading partners, comprising about 78 per cent of US foreign trade in goods and services last year.

Seven economies are on the department’s ‘Monitoring List’ of major trading partners that merit close attention to their currency practices and macroeconomic policies: China, Japan, Malaysia, Singapore, Taiwan, Vietnam and Germany.

The report also reiterated the department’s call for increased transparency from China.

“China’s failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate policy make China an outlier among major economies and warrant Treasury’s close monitoring,” the department said in a release.

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