China says US currency manipulator labeling could cause chaos in financial markets

China’s central bank said on Tuesday that Washington’s decision to label Beijing as a currency manipulator would “severely damage international financial order and cause chaos in financial markets”.

Washington’s decision to ratchet up currency tensions on Monday would also “prevent a global economic and trade recovery,” the People’s Bank of China (PBoC) said in the country’s first official response to the latest US salvo in the two sides’ rapidly escalating trade war, Reuters reported.

China “has not used and will not use the exchange rate as a tool to deal with trade disputes,” the PBoC said in a statement on its website.

“China advised the US to rein in its horse before the precipice, and be aware of its errors, and turn back from the wrong path,” it said.

The US currency accusation, which followed a sharp slide in the yuan on Monday, has driven an even bigger wedge between the world’s largest economies and crushed any lingering hopes for a quick resolution to their year-long trade war.

The dispute has already spread beyond tariffs to other areas such as technology, and analysts caution tit-for-tat measures could widen in scope and severity, weighing further on business confidence and global economic growth.

The US Treasury Department said on Monday it had determined for the first time since 1994 that China was manipulating its currency, taking their trade dispute beyond tariffs.

The department referred to a PBoC statement on Monday as an open acknowledgement that it “has extensive experience manipulating its currency and remains prepared to do so on an ongoing basis.”

source: Iran Daily