US: China not currency manipulator

WASHINGTON -- The US Treasury Department on Wednesday declined to name China as a currency manipulator, saying it would closely monitor the pace of RMB appreciation.

"China's current account surplus has declined from a peak of 10. 1 percent of GDP in 2007 to 1.9 percent of GDP in 2011 and 2.5 percent in the first half of 2013. The appreciation of China's real effective exchange rate has been an important factor in reducing the current account surplus," the US Treasury said in a latest semi-annual report to Congress on International Economic and Exchange Rate Policies.

Meanwhile, it noted "the RMB is appreciating on a trade- weighted basis, but not as fast or by as much as is needed."

According to the report, through mid-October 2013, the RMB has appreciated by a total of 12 percent against the US dollar and 16 percent on a real, inflation-adjusted basis from June 2010.

In the first nine months of the year, the RMB has appreciated 6. 3 percent on a nominal effective basis, and 6.6 percent on a real effective basis, taking into account differences in inflation. On real effective basis, the RMB has appreciated the most in this period among the currencies covered in the report, the US Treasury said.

The report said the RMB's relative stability over recent months stands in sharp contrast to the depreciation of many other emerging market currencies this year, and the RMB has appreciated on a broad basis in 2013.

The US Treasury said it will carefully monitor the pace of RMB appreciation in China and policies in Japan and the extent to which Japan supports the growth of domestic demand.

The Treasury also said it will monitor developments in economies where exchange rate adjustment is incomplete and push for comprehensive adherence to recent G-7 and G-20 commitments.

The US Omnibus Trade and Competitiveness Act of 1988 requires the Treasury to provide reports on whether its major trading partners manipulate the rate of exchange between their currency and the US dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.

Treasury last published the semi-annual report on April 12, 2013.

In nine previous such reports from the Obama administration, the US government has declined to label China as a "currency manipulator."