Treasury Secretary Janet Yellen is expected to soften Washington’s stance on the yuan and decline to call China a currency manipulator in her first semi-annual foreign exchange report.
Janet Yellen will decline to call China a currency manipulator, according to a «Bloomberg» report citing unnamed sources, in her upcoming foreign exchange report due on Thursday this week.
In addition, Yellen’s team is also exploring options to loosen rules created by the former Donald Trump administration for defining currency manipulators in a move that could reduce the number of nations under scrutiny by nearly half.
Contradictory Views
While Yellen’s public report is expected to claim no manipulation, her team is simultaneously concerned that China is «masking currency intervention through activities at state-owned banks», the report added.
Although the currency manipulator label is accompanied by no immediate penalties, it has the potential to shake finance markets and designated nations could face exclusion from U.S. government contracts after the label remains for a year.
In 2019, the Treasury Department designated China as a currency manipulator under predecessor Steven Mnuchin before lifting the label five months later to win trade deal concessions.
