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Yuan still undervalued: US Treasury secretary

Wednesday, May 27, 2015 - 22:47
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The United States still believes China's yuan currency is undervalued, unlike the International Monetary Fund, US Treasury Secretary Jack Lew said on Wednesday.

[LONDON] The United States still believes China's yuan currency is undervalued, unlike the International Monetary Fund, US Treasury Secretary Jack Lew said on Wednesday.

"We continue to think it's undervalued," Mr Lew said in a talk at the London School of Economics university.

The IMF said on Tuesday that the yuan, also known as the renminbi (RMB), was no longer undervalued.

"The standard has to be: what will they do when there's pressure on the RMB?" asked Mr Lew.

"For competitive purposes, will they continue to refrain from intervention?"

The yuan's value has been a source of tension for years, with China's major trade partners - led by the United States - accusing Beijing of keeping it artificially low to give Chinese exporters an unfair competitive advantage, which Beijing has denied.

"Going forward, are they truly committed to having a market-determined exchange rate?" Mr Lew asked.

China keeps a tight grip on the value of the yuan out of concerns that unpredictable currency inflows and outflows could harm the economy and weaken its financial control.

AFP