U.S. to keep an eye on Chinese currency for manipulation: Mnuchin


The next phase for the two superpowers, following
the tariff conflict, could be a currency war. America’s Treasury Secretary has vowed to
closely monitor the rapidly weakening yuan for signs of manipulation. Choi Si-young reports. U.S. Treasury Secretary Steven Mnuchin said
last Friday in an interview with CNBC that he is closely monitoring the weakening Chinese
currency, which President Trump has said China is manipulating. He also said he will review whether to designate
China as a currency manipulator. The Chinese media responded Monday. The Global Times, China’s state-run English-language
daily, quoted a number of pro-government pundits who said China is not manipulating its currency
to help its exports, and it claimed China is doing everything according to market standards. Experts say there is no sign of the Chinese
government intervening directly… but that it may be allowing the yuan to depreciate
gradually because that makes the country’s exports cheaper. Economists at JP Morgan support that view,
noting that China has traditionally responded to trade disputes by letting the yuan depreciate. According to Bank of America’s wealth management
division, Merril Lynch, a weakening Chinese currency lowers the purchasing power of Chinese
importers, and in the long run, stimulates capital outflow. Robin Brooks, chief economist at the Institute
of International Finance, an industry group, warned that in light of the 2015 yuan depreciation
crisis, a weakened yuan will likely lead to a plunge in oil prices. He also said the currencies of countries that
export raw materials, like Colombia, Russia and Malaysia, are likely to tumble first,
followed by other countries in Asia. Choi Si-young, Arirang News.

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