US Treasury Secretary Benson said he has no objections to this year’s movements in the Renminbi (RMB) against the US dollar, but believes the RMB’s depreciation against the euro will pose challenges for the European economy.
According to comprehensive reports from Bloomberg and other foreign media, on the 15th in Madrid, Benson was interviewed and spoke about the notion that China is engaging in “opportunistic devaluation” this year, saying: “They have not done this against the US dollar. In fact, this year the RMB is stronger against the dollar, but has fallen to a historic low against the euro. This is a problem for Europeans.”
Benson also revealed that US tariffs on Chinese imports are helping to reduce the US trade deficit, with China–US trade this year down 14%, while China–EU trade has increased by 6.9%.
In recent months, the RMB has fallen to a historic low against the euro, dropping from about 7.5 RMB per euro at the start of the year to over 8.4 RMB per euro. Trade and currency experts point out that this has fueled a surge in Chinese exports to Europe, further widening the EU’s trade deficit with China and intensifying frictions between Brussels and Beijing.
Meanwhile, the RMB has appreciated slightly against the US dollar this year, from 7.3 RMB per dollar to 7.1 RMB per dollar.
As for whether the RMB’s depreciation involves manipulation, Benson said: “This is a closed currency, so the exchange rate level is managed artificially by the authorities.”
On July 3, Benson told Bloomberg that the RMB becoming a global major reserve currency is actually a fallacy because it cannot be freely traded.