Bank of China has accused Western media of destabilization of the currency market of the country


The Central Bank of China has accused Western media of destabilization of the currency market of the country, the promotion of the game against the yuan, as well as introducing the reader astray. The statement, excerpts of which leads Bloomberg, was published on the website of the controller after a few hours after Reuters, citing unnamed sources close to the regulators informed about the readiness of the Central Bank to weaken the yuan to 6.8 to the dollar this year to support the national economy. The specific name of the media that published “untrue information” in the statement of the Central Bank is absent.

The document stresses that the fundamentals for a weaker yuan in the long term do not exist, and the government is not planning to devalue the yuan with the aim of providing competitive advantage to its exporters. The Central Bank will maintain a reasonable and balanced exchange rate of the yuan and continue to reform the monetary system of the country, the statement said.

Immediately after the publication of the article by Reuters, the offshore Renminbi traded on the Hong Kong site, fell against the dollar by 0.7%, after that pared losses to 0.18% of the 18:26 (Hong Kong). The offshore yuan traded in Shanghai slipped 0.26%, to 6.66 per dollar. By the end of the session, it recovered and was trading 0.08% lower from the previous close. As of 18:00 (GMT) offshore RMB added of 0.16%, trading at a level of 6.66 per dollar.

Central Bank of China ready to ease to 6.8 yuan per dollar, which corresponds to the amount by which the rate has decreased in the last year, to 4.5%, Reuters reported citing its sources. The regulator plans to ensure the gradual reduction of the rate to, first, prevent the outflow of capital, and secondly, to avoid criticism from their trading partners such as the United States, noted in the Agency material.

The weakening of the yuan due to the strengthening dollar and a slowdown of China’s economic growth in 2015 the country’s GDP fell to a 25-year low, say currency dealers. However, investors and trade partners of Beijing, with the alertness to react to the significant depreciation of the yuan after the two devaluations in August 2015 and January 2016, wrote Reuters.

In early June, US Treasury Secretary Jack Lew said that the consistent weakening of the yuan is a “problem”. The candidate for the post of President of the United States Donald trump said that if elected, I will instruct the Finance Ministry to recognize China a currency manipulator.

Premier of the State Council of China Li Keqiang has repeatedly noted that China has no intention to help its export-oriented producers due to the devaluation of the national currency. In response to the review of the trump the official representative of the Chinese foreign Ministry Hong lei said that the negative trade balance of U.S. trade with China is not due to the Chinese currency. Currently, the yuan fell to a 5.5-year low against the dollar. According to the office of the U.S. trade representative, the negative trade balance of U.S. trade with China amounted to us $336,2 billion in 2015. In April, exports from China fell by 1.8% compared to April of last year, according to the General administration of customs. However in RMB in connection with the depreciation of the currency exports grew by 4.1%.

China — the world’s largest exporter and the yuan acts as a barometer for other export-oriented countries. Central Bank of China is trying to make the yuan more market-oriented and transparent. This year, the regulator used the peg of the yuan to the dollar when the U.S. currency became cheaper to weaken the yuan, to a basket of currencies — when the dollar strengthened, writes Reuters, citing analysts and unnamed Chinese officials. This tactic gives the Central Bank more room for manoeuvre in adjusting the national currency to the dollar and countering the game on the increase or decrease rate.