WASHINGTON - The
U.S. Department of the Treasury today released the Semi-Annual Report to
Congress on International Economic and Exchange Rate Policies that is required
under Sections 3004 and 3005 of the Omnibus Trade and Competitiveness Act of
1988. The Report covers international economic and foreign exchange
developments in the first half of 2012. Where pertinent and available, data and
developments through early November 2012 are included.
Among other content, the report outlines the actions taken
by China to appreciate its currency and move to a more market determined
exchange rate. The renminbi (RMB) has
appreciated by 9.3 percent in nominal terms and 12.6 percent in real terms
against the dollar since June 2010. China’s trade and current account surpluses
both have fallen to 2.6 percent of GDP from peaks of 8.8 and 10.1 percent of
GDP, respectively. The Chinese
authorities have substantially reduced the level of official intervention in
exchange markets since the third quarter of 2011, and China has taken a series
of steps to liberalize controls on capital movements, as part of a broader plan
to move to a more flexible exchange rate regime. In light of these developments, Treasury has
concluded that the standards identified in Section 3004 of the Act during the
period covered in this Report have not been met with respect to China.
Nonetheless, the available evidence suggests the RMB remains significantly undervalued,
and further appreciation of the RMB against the dollar and other major
currencies is warranted.
Treasury will continue to closely monitor exchange rate
developments in all the countries covered in this report, with particular
attention to the pace of RMB appreciation, and press for policy changes that
yield greater exchange rate flexibility, improve transparency, level the
playing field for American workers and businesses, and support a strong,
sustainable, and balanced global economy.
The Report, along with past Reports, can be found at http://www.treasury.gov/resource-center/international/exchange-rate-policies/Pages/index.aspx.