The U.S. Treasury Department officially designated China as a currency manipulator after the country allowed the yuan to fall below the 7-per-dollar threshold for the first time in 11 years in an apparent response to President Donald Trump's latest tariffs threat.
The Treasury Department accused China of devaluing its currency "to gain unfair competitive advantage in international trade," adding that the People's Bank of China has admitted to having "extensive experience" in manipulating currency and standing ready "to do so on an ongoing basis."
"In recent days, China has taken concrete steps to devalue its currency, while maintaining substantial foreign exchange reserves despite active use of such tools in the past," the Treasury Department said in an Aug. 5 press release.
Treasury Secretary Steven Mnuchin will engage with the International Monetary Fund to address China's actions, his department said.
PBOC Governor Yi Gang reportedly said earlier that China will not pursue competitive devaluation of the yuan, and will not use the currency as a tool in trade conflicts.
In May, the Trump administration avoided labeling China as a currency manipulator in the Treasury Department's biannual report to Congress on economic and exchange rate policy.
However, China was then kept on a monitoring list of economies that "merit close attention" due to concerns over exchange-rate practices. That list also included Ireland, Italy, Malaysia, Singapore, Vietnam, Germany, Japan and South Korea.