The latest report by International Monetary Fund (IMF) concluded that the exchange rate of the Chinese yuan was "broadly in line with medium-term fundamentals", and the Chinese monetary authority barely intervened in the foreign exchange market.
The report, released late Friday in Washington, was a blow to the labeling of China as "a currency manipulator" by the US administration, experts said.
The value of the Chinese currency and the country's external position in 2018 were "broadly in line with the level consistent with medium-term fundamentals and desirable policies," the report said, citing that China's current account surplus fell by around 1 percentage point to 0.4 percent of GDP in 2018 and is projected to remain contained at 0.5 percent of GDP in 2019.
Estimates showed that the People's Bank of China, the country's central bank, has had "little FX intervention", said the report, which is based on IMF's latest Article IV consultation with China, a review of the Chinese economy that concluded on July 31.
The IMF's conclusion came in just four days after the US Treasury officially labeled China as a "currency manipulator" on Monday. The Chinese yuan weakened to beyond 7 per dollar for the first time in more than a decade earlier this week.
"The IMF conclusion is objective and reflected that the renminbi was assessed to be broadly in line with medium-term fundamentals. The result kept pace with what it said in July," said Zhang Xiaohui, a senior researcher of the China Finance 40 Forum (CF40), and former assistant governor of the PBOC.
