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U.S. Softens Criticism of Yuan Level Amid Currency Pressures

  • Treasury: Yuan now below `appropriate medium-term valuation'
  • U.S. previously said currency was `significantly undervalued'
Updated on

The U.S. Treasury dropped its view that China’s currency is “significantly undervalued” while saying that the forces driving appreciation in the longer term remain and China needs to allow such strengthening eventually.

The yuan remains “below its appropriate medium-term valuation,” the department said Monday in its semiannual report on foreign-exchange policies. The “core factors” that have driven the appreciation of the yuan in recent years remain in place, such as a large and growing current-account surplus, and net inflows of foreign direct investment, the Treasury said.