BREAKING NEWS Purdue men's basketball beats Indiana, 67-58 Full Story
SEVERE WX : Flood Warning View Alerts

Mnuchin says he's watching China's currency moves as the trade war escalates

US Treasury Secretary Steven Mnuchin is keeping a close eye on China's currency as the trade war between the...

Posted: Oct 11, 2018 1:42 PM
Updated: Oct 11, 2018 1:42 PM

US Treasury Secretary Steven Mnuchin is keeping a close eye on China's currency as the trade war between the two countries escalates.

After meeting with China's central bank governor on Thursday, Mnuchin told CNN that he has been "carefully monitoring" the yuan's decline against the dollar.

Asia

Banking, finance and investments

Business, economy and trade

China

Continents and regions

Currencies

Donald Trump

East Asia

Economy and economic indicators

Exchange rates

Financial markets and investing

Foreign-exchange markets

Government and public administration

Government bodies and offices

Money, banknotes and coins

North America

Political Figures - US

The Americas

United States

US federal government

White House

Beijing

International trade

Trade and development

Business figures

Securities trading

Steven Mnuchin

Stock markets

Economic policy

International trade law

Tariffs and customs

Trade regulation and policy

Trade wars

Monetary policy

Unrest, conflicts and war

"If someone intervenes to support their currency, that's fine," Mnuchin said in an interview in Bali, Indonesia. "If someone intervenes to devalue their currency, that's not fine."

In the past six months, the yuan has dropped more than 9% against the US dollar. And there are growing signs that the country's currency may fall to 7 yuan to the greenback — a threshold not crossed since before the 2008 financial crisis.

Mnuchin's Treasury Department is due to send its twice-a-year report on currencies to Congress next week. Speaking Thursday on the sidelines of an International Monetary Fund conference, he didn't comment on whether the report would label China a currency manipulator.

The yuan's sharp depreciation has fueled accusations from President Donald Trump that China is deliberately devaluing its currency — claims Beijing has repeatedly rejected.

The currency has been falling partly because of fears that the trade war will hurt the Chinese economy. A weaker yuan helps to offset the impact of tariffs by making Chinese goods cheaper for Americans to buy.

Beijing's role

Chinese Foreign Ministry spokesman Lu Kang said on Tuesday that Beijing was not using its currency as a tool in the trade rift to make exports cheaper. He also dismissed such suggestions as "groundless and irresponsible."

The Chinese government plays a significant role in setting the value of the yuan and how it trades.

Economists generally agree Beijing may have kept its currency artificially low in the past, but they are skeptical that the government has driven it down against the dollar and other major currencies this year.

China's currency, also known as the renminbi, has declined amid an escalating trade war with the United States, a slowdown in economic growth and a broader emerging market sell-off.

'The objective is not tariffs'

The Trump administration has slapped new tariffs on Chinese exports worth hundreds of billions of dollars. It is seeking to gain an edge by upping pressure on China as it struggles with slowing economic growth and sharp declines in the country's stock markets.

China has retaliated with tariffs on a much smaller amount of American goods because it buys far less from the United States than it sells to it.

Mnuchin didn't speculate on whether the president will inflict more economic pain on Beijing through additional tariffs.

"Our objective is to have a more balanced trading relationship and protect our technology and our companies," he said. "The objective is not tariffs. The objective is to open markets."

Trump is expected to meet with Chinese President Xi Jinping at the Group of 20 leaders summit in Buenos Aires at the end of November.

The Trump administration has made currency issues part of its on-off trade negotiations with Beijing.

"We want to make sure that we don't have gains on trade issues only to be offset on currency issues," Mnuchin said.

He said he worked "very closely" with US Trade Representative Robert Lighthizer to add a currency provision in the renewed trade agreement with Mexico and Canada. It would be the "model" the administration would use in future free trade agreements, he added.

Will tensions get worse?

Trump has repeatedly accused China and the European Union of manipulating their currencies, saying it is "taking away our big competitive edge."

He has also complained that the Federal Reserve's rate hikes are moving too fast.

Higher interest rates have strengthened the dollar, making it more attractive for investors to hold assets in the greenback compared with other currencies.

"The Fed is making a mistake," Trump told reporters Wednesday. "They're so tight. I think the Fed has gone crazy."

Despite Trump's criticisms, the Treasury Department has so far stopped short of labeling China a currency manipulator.

If it were to do so this month, the move wouldn't immediately trigger any US penalties, but it would further inflame the tensions between the world's two largest economies.

Lafayette
Partly Cloudy
48° wxIcon
Hi: 50° Lo: 25°
Feels Like: 46°
Kokomo
Partly Cloudy
39° wxIcon
Hi: 45° Lo: 24°
Feels Like: 39°
Rensselaer
Partly Cloudy
39° wxIcon
Hi: 48° Lo: 22°
Feels Like: 39°
Lafayette
Partly Cloudy
48° wxIcon
Hi: 49° Lo: 24°
Feels Like: 46°
Danville
Partly Cloudy
45° wxIcon
Hi: 50° Lo: 25°
Feels Like: 41°
Frankfort
Partly Cloudy
43° wxIcon
Hi: 48° Lo: 23°
Feels Like: 43°
Frankfort
Partly Cloudy
43° wxIcon
Hi: 46° Lo: 23°
Feels Like: 43°
Monticello
Partly Cloudy
43° wxIcon
Hi: 48° Lo: 23°
Feels Like: 39°
Monticello
Partly Cloudy
43° wxIcon
Hi: 49° Lo: 24°
Feels Like: 39°
Logansport
Clear
39° wxIcon
Hi: 46° Lo: 24°
Feels Like: 39°
Dry, mild conditions continue.
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 665285

Reported Deaths: 12697
CountyCasesDeaths
Marion910581653
Lake48637887
Allen36050641
Hamilton32231398
St. Joseph30243514
Elkhart25484420
Vanderburgh21315382
Tippecanoe20185205
Johnson16425361
Porter16053276
Hendricks15899301
Clark12032182
Madison11779321
Vigo11672231
Monroe10394164
Delaware9879179
LaPorte9821198
Howard9095199
Kosciusko8588111
Bartholomew7504147
Warrick7445153
Hancock7439134
Floyd7255172
Wayne6654192
Grant6453157
Boone611991
Morgan6118126
Dubois5933112
Dearborn550669
Cass5477100
Marshall5446105
Henry542695
Noble510978
Jackson465567
Shelby462591
Lawrence4193113
Gibson404985
Harrison402764
Clinton397053
Montgomery390584
DeKalb387178
Knox357885
Miami357863
Whitley350638
Huntington348377
Steuben339855
Wabash333076
Putnam331960
Ripley327862
Adams325149
Jasper318443
White298052
Jefferson295974
Daviess285696
Fayette272656
Decatur271388
Greene262280
Posey261432
Wells258975
Scott251450
LaGrange242170
Clay241444
Randolph225877
Spencer219330
Jennings216344
Washington213027
Sullivan203639
Fountain202542
Starke189251
Owen183453
Fulton179637
Jay178528
Carroll176919
Perry173836
Orange171351
Rush165422
Vermillion161542
Franklin159735
Tipton149241
Parke140116
Pike128433
Blackford120627
Pulaski107544
Newton96732
Brown95240
Benton92413
Crawford92113
Martin80314
Warren75914
Switzerland7558
Union67510
Ohio54111
Unassigned0434

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events