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US avoids calling China a currency manipulator, but keeps it on watch list

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US avoids calling China a currency manipulator, but keeps it on watch list

The U.S. Treasury Department refrained from calling China a currency manipulator, but it kept the country on a watch list, citing Beijing's opaque exchange rate practices.

In a semiannual report submitted to Congress, the Treasury said no major trading partner met the criteria for the designation of currency manipulator, although six countries including China were found to require "close attention."

"Of particular concern are China's lack of currency transparency and the recent weakness in its currency," Treasury Secretary Steven Mnuchin said in a statement.

"These pose major challenges to achieving fairer and more balanced trade, and we will continue to monitor and review China's currency practices, including through ongoing discussions with the People's Bank of China," Mnuchin added. His department said the yuan's recent depreciation will likely worsen China's trade imbalance with the U.S.

The Treasury urged China to improve the transparency of its exchange rate and reserve management operations and goals, and pursue more market-based economic reforms to boost confidence in the yuan.

"Treasury is deeply disappointed that China continues to refrain from disclosing its foreign exchange intervention," the department said.

In addition to China, the Treasury also kept Germany, India, Japan, South Korea and Switzerland on a "monitoring list" in relation to currency practices.