United States closely monitors Chinese and Swiss exchange rate policies – 12/03/2021 at 6:38 PM

The US Treasury said on Friday that it would continue to closely monitor China’s economic policies and Beijing’s measures to influence the price of its currency, as well as the exchange rate policies of Vietnam, Taiwan and Switzerland.

Washington has not accused any country of manipulating its currency in order to gain a competitive advantage, but has placed twelve of them on a watch list.

The semi-annual report presented to Congress focuses on countries with large trade surpluses that intervene in the foreign exchange market to prevent their currencies from appreciating, making their exports less competitive.

A Treasury official told reporters that the US administration is not concerned about exchange rate policy measures being taken to address short-term shocks.

The conclusions of the report are essentially symbolic and do not provide for sanctions.

Beijing has long been the subject of special attention, Washington accusing the Chinese government of maintaining its exchange rate at an artificially low level thanks to its immense reserves in US dollars, which hurts US industrialists and workers.

“The Treasury is working tirelessly to promote a more solid and balanced global recovery that benefits American workers, including engaging in close dialogue with major economies on currency-related matters,” Treasury Secretary Janet Yellen said in a statement. .

The report criticizes Beijing for its lack of transparency regarding its interventions on the exchange rate, stressing that “the activities of state banks in particular justify close scrutiny of the Treasury”.

The ministry is concerned about the undervaluation of the Chinese currency “thanks to a long-lasting and large-scale intervention in the foreign exchange market and the considerable size of China’s reserves.”

Like many other governments, China has put in place a massive stimulus package during the Covid-19 pandemic to support its economy, but the spending “has targeted the rapid recovery of the industry rather than supporting consumer spending. households “.

The Treasury calls for more measures to support demand, believing that “China should seek to reverse the dynamic of rebalancing its economy and strengthen its long-term growth prospects”.

Switzerland, for its part, narrowly failed to meet the three criteria defined in US law, but “the Treasury will continue to conduct an in-depth analysis” of the country’s exchange rate policies and intends to continue its dialogue with the Swiss government on “its options. to address the underlying causes of its external surplus “.

In July, Washington reached an agreement with Vietnam over concerns over its exchange rate policy, but the country continues to meet the three criteria for increased surveillance.

The Treasury said in the report that it had initiated discussions with Taipei in order to “develop a plan with specific actions to determine the underlying causes of the undervaluation of Taiwan’s currency.”

China, Japan, South Korea, Germany, Ireland, Italy, India, Malaysia, Thailand, Mexico and Switzerland are among the countries that meet two of the three criteria established by the US administration.



Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.