The U.S. will seek to include measures to deter currency manipulation in its trade deals with other countries, including Japan, going forward, Treasury Secretary Steven Mnuchin told reporters at the International Monetary Fund's and the World Bank Group's annual meetings in Bali, Indonesia.
The currency chapter in the new U.S.-Mexico-Canada Agreement will serve as a model for future trade pacts to prevent trading partners from manipulating their currencies, Mnuchin said, according to Reuters. So far, the U.S. has not discussed currency in its trade negotiations with Japan, but if it becomes necessary, the finance chiefs of both countries will discuss the matter, Japan's Economy Minister Toshimitsu Motegi said.
Mnuchin also brought forth the issue of currency manipulation in his statement at the IMF/World Bank meetings, saying: "We encourage the IMF to clearly indicate where its members continue to employ macroeconomic, foreign exchange, and trade policies that contribute to unfair competitive advantages." He told reporters that the U.S. will not allow China to depreciate the yuan for competitive purposes amid the ongoing trade rift between two countries, Reuters noted.
Meanwhile, People's Bank of China Governor Yi Gang said his country will continue to keep the yuan exchange rate broadly stable at an adaptive equilibrium level, adding: "China will continue to let the market play a decisive role in the formation of the [yuan] exchange rate."
"We will not engage in competitive devaluation, and will not use the exchange rate as a tool to deal with trade frictions," Yi said.
Mnuchin's office is scheduled to release a biannual foreign-currency report in the week of Oct. 15 and is expected to say that China is not manipulating the yuan.