WASHINGTON: The US government on Wednesday refrained from naming China or any other trading partner as a currency manipulator, as it leans on import tariffs to try to cut a trade deficit with China.
In its semi-annual currency report, the US Treasury Department said a recent depreciation of China’s yuan currency will likely exacerbate the US trade deficit, but US officials found Beijing appeared to be doing little to directly intervene in the currency’s value.
US President Donald Trump has claimed that China’s rise as an exporting powerhouse has hurt US workers and since taking office he has ordered tariffs on more than $200 billion in Chinese imports.
“Of particular concern are China’s lack of currency transparency and the recent weakness in its currency,” said Treasury Secretary Steven Mnuchin.
Since the Treasury’s last currency report was issued on April 13, the yuan has fallen by more than 9.0 percent against the US dollar.
In the last week, the currency has pushed closer to the key 7 to the dollar threshold, a level not breached since 2008. Some currency derivatives show market participants expect the yuan to weaken past that level within a year.
The Treasury noted reports that China was trying to counter some of the yuan depreciation and said China could bolster confidence in the yuan by engaging in more market-friendly reforms.
“Treasury is deeply disappointed that China continues to refrain from disclosing its foreign exchange intervention,” the department said in its report.
It added that China should advance macroeconomic reforms that support greater household consumption growth and help rebalance the economy away from investment.
China’s multi-decade investment boom has helped make it the world’s factory and fueled a trade surplus in goods with the US of $390 billion in the 12 months through June.
Some China experts have speculated that Beijing could use yuan devaluation as a weapon in a broader trade war with the US.
The Treasury also said it was keeping China, India, Japan, Germany, South Korea and Switzerland on a monitoring list for extra scrutiny.
The Treasury said it was concerned that South Korea stepped up interventions in currency markets that appeared “to have been for the purpose of slowing won appreciation against the dollar.”
The Treasury said India was on course to be left off the list when it is next updated in six months. India was added in April after a burst in foreign exchange sales by the country’s central bank.
US government refrains from calling China a currency manipulator
US government refrains from calling China a currency manipulator
- The US Treasury Department said a recent depreciation of China’s yuan currency will likely exacerbate the US trade deficit
- China is trying to counter some of the yuan depreciation
Closing Bell: Saudi main index closes in red at 10,325
RIYADH: Saudi Arabia’s Tadawul All Share Index edged down on Monday, shedding 38.83 points, or 0.37 percent, to close at 10,325.20.
The total trading turnover of the benchmark index stood at SR4.02 billion ($1.07 billion), with 61 listed stocks advancing and 191 declining.
The Kingdom’s parallel market Nomu also declined by 144.88 points, or 0.62 percent, to close at 23,226.94.
The MSCI Tadawul Index advanced by 0.11 percent to 1,371.06.
The best-performing stock on the main market was Saudi Industrial Development Co., with its share price rising 6.32 percent to SR12.44.
Al Yamamah Steel Industries Co.’s share price increased by 6.06 percent to SR35.
Cherry Trading Co. also saw its stock climb 5.27 percent to SR26.16.
Conversely, the share price of the National Shipping Co. of Saudi Arabia, also known as Bahri, edged down 5.87 percent to SR26.64.
On the announcements front, SAL Saudi Logistics Services Co. said it intends to issue a riyal-denominated sukuk through a private placement, both inside and outside the Kingdom.
In a Tadawul statement, the company said the amount and terms of the sukuk offering will be determined at a later stage, based on prevailing market conditions.
SAL added that the proceeds will be used for general corporate purposes, capital expenditure plans to support future expansions and projects, and to achieve long-term financial and strategic objectives.
The company has appointed J.P. Morgan Saudi Arabia and SNB Capital as joint lead managers and bookrunners for the sukuk offering.
SAL’s share price declined by 0.63 percent to SR158.90.
In another announcement, Almarai Co. said the diesel price increase from January is expected to result in additional direct costs of approximately SR70 million for the company this year.
The firm added it will continue to focus on business efficiency, cost optimization, and other initiatives to mitigate the impact of the diesel price increase.
Almarai’s share price fell 3.50 percent to SR41.90.
