U.S. Treasury still concerned about yuan depreciation: official

NUSA DUA, Indonesia (Reuters) – The United States remains concerned about China’s recent currency depreciation, a senior Treasury official said on Monday, adding that it was unclear whether Treasury Secretary Steven Mnuchin would meet with any Chinese officials at the International Monetary Fund and World Bank meetings this week.

“On Chinese currency, of course, we continue to closely monitor developments in the (yuan), we remain concerned about some of the recent depreciation of the RMB,” the official told reporters on a conference call. “More broadly, we’re concerned about China’s turn away from more market-oriented policies and continued reliance on non-market mechanisms that impact the macroeconomic and trade environment.”

The official said these concerns would be laid out in the Treasury Department’s semi-annual currency report, which is due to be released next week. But he declined to preview any details of the report.

Mnuchin told Reuters in July that he was closely monitoring the depreciation of China’s yuan for signs of manipulation. U.S. President Donald Trump has frequently accused China of manipulating its currency for a trade advantage.

The Treasury official said Mnuchin currently has no meetings scheduled with Chinese officials at the IMF and World Bank meetings on the Indonesian resort island of Bali, but his schedule was still being firmed up.

Mnuchin’s normal Chinese counterpart on trade-related issues, Vice Premier Liu He, will not attend the meetings, so there are unlikely to be trade discussions, the official said.

China normally sends central bank governor Yi Gang and Finance Minister Liu Kun to IMF and World Bank gatherings. It is possible Mnuchin would meet with them, but they would likely discuss topics other than trade, the official added.

The United States and China are embroiled in an escalating trade war. Washington last month slapped tariffs on $200 billion worth of Chinese goods, which prompted Beijing to retaliate with duties on $60 billion worth of U.S. products.

The United States and China had already imposed tariffs on $50 billion worth of each other’s goods.

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