“This lack of transparency will not preclude Treasury from designating China if available evidence suggests that it is intervening through formal or informal channels to resist RMB appreciation in the future,” the department said in a release citing the report.
Without designating China as a currency manipulator during the four quarters to June 2025 in a report to Congress, the US Department of Treasury said the country stands out in its lack of transparency around its exchange rate policies and practices.
Ten economies are on its ‘Monitoring List’: China, Japan, South Korea, Taiwan, Thailand, Singapore, Vietnam, Germany, Ireland and Switzerland.
“Given China’s extremely large and growing external surpluses, and its substantially undervalued exchange rate, it is important that the Chinese authorities allow the RMB exchange rate to strengthen in a timely and orderly manner in line with market pressure and macroeconomic fundamentals,” it noted.
The report concluded that no major US trading partner manipulated the rate of exchange between its currency and the US dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade during the four quarters.
However, ten economies are on the department’s ‘Monitoring List’ for their currency practices and macroeconomic policies: China, Japan, South Korea, Taiwan, Thailand, Singapore, Vietnam, Germany, Ireland and Switzerland. All except Thailand were on the Monitoring List in the June 2025 Report.
The department is also increasing its vigilance about other policies beyond foreign exchange intervention employed by major trading partners that may influence foreign exchange markets. Such policies include the use of capital controls and macro-prudential measures and other government investment vehicles like pension funds.
Because central banks may use foreign exchange swaps to sterilise or offset spot interventions so as not to affect domestic monetary conditions, the department is also now looking more closely at trading partners’ net forward positions, the release added.
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