China won’t use competitive currency devaluation or the foreign exchange rate as a tool to cope with trade frictions, according to a senior central bank official.
"The yuan’s exchange rate is decided by the market," Li Bo, director of the People’s Bank of China’s monetary policy department, said at a press conference in Beijing. He said the currency has more flexibility this year and the central bank is confident of keeping the rate "basically stable at a reasonable equilibrium level."
The world’s two biggest economies will resume talks this week about the trade dispute after an earlier deal collapsed in May. Trump is prodding China to offer more at the bargaining table, while the Chinese foreign ministry said it was hopeful for a positive result.
Li’s comments on Tuesday came after President Donald Trump accused China of manipulating its currency in an interview with Reuters.