Treasury Secretary Steven Mnuchin said Friday that Chinese officials made clear to him they have no interest in allowing the yuan to depreciate further.
Mnuchin met earlier Friday with China’s central bank Governor Yi Gang on the sidelines of the IMF/World Bank annual meetings in Bali, Indonesia. Before he left for Asia, Mnuchin warned China against competitive devaluations.
In an interview on CNBC, Mnuchin said he told Yi that he was concerned about the weakness in the yuan, officially called the renminbi. The yuan has weakened 10% against the dollar since its peak in March.
“They made it clear it is not in their interest to see depreciation further,” Mnuchin said.
The Treasury Secretary said a report that his agency’s staff had concluded that China isn’t manipulating the yuan was “not accurate.”
He said he wouldn’t comment further on the closely watched report on foreign currencies, which would be released next week.
Overnight, the People’s Bank of China set the yuan
midpoint at 6.9120, its weakest level since March 2017. The PBOC sets the price for the yuan daily to smooth out its fluctuations.
China reported a record trade surplus of $34.13 billion with the U.S. in September. Mnuchin said this was probably “just a monthly blip” as there were a lot of purchases in advance of tariffs.
Mnuchin said any trade talks with China would include discussions of currency issues.
“We’re going to make sure that currency is definitely part of the discussions. We are going to make sure that whatever we make up on trade we don’t lose on currencies,” he said.
The U.S. has imposed tariffs on $250 billion of Chinese goods and President Donald Trump has said he’s ready to extend the tariffs to a further $257 billion, essentially covering all of China’s imports into the country.
Trump is scheduled to meet with Chinese leader Xi Jinping at the end of November at the Group of 20 leaders’ summit in Buenos Aires. Mnuchin is said to have pushed for the meeting, according to the Wall Street Journal.
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