China not manipulating currency value

The Obama administration said yesterday that China was not manipulating the value of its currency, in a move which is seen as an attempt to avoid stoking the long-running trade dispute between the two countries. 

According to the Treasury Department, the renminbi was ''substantially undervalued'' against the dollar and the Chinese government bought large amounts of foreign currencies in an effort to hold down the value of its currency.

The Treasury said the Chinese government's measure did not amount to manipulation, which would warrant economic retaliation from the US. 

Analysts say the judgment was on expected lines as successive administrations had come up with the same finding every six months since 1994. Additionally, China had allowed its currency to rise around 9 per cent against the dollar over the last year, which included the effects of inflation. 

According to the Treasury, the progress was ''insufficient'.

It added that more rapid progress was needed.