IMF Hints Weaker Yuan Is to Blame for China’s Growing Imbalances

The International Monetary Fund linked China’s booming exports and growing trade imbalances in part to a real depreciation of the yuan, a subtle shift in its stance that adds to rising global concerns over the currency’s weak exchange rate.

In carefully worded remarks following the conclusion of the IMF’s annual review of China’s economy, fund officials said the country’s low inflation relative to price levels among its trading partners has led to a weaker yuan in real terms. They urged Chinese policymakers to adopt bolder stimulus to boost consumption, which would lift consumer prices, while allowing more exchange rate flexibility.