The International Monetary Fund (IMF) on Friday said that it stood by its assessment that the value of China’s RMB was largely in line with economic fundamentals, following the United States decision to designate China as a currency manipulator, reported Reuters.
James Daniel, director of the IMF’s China department, said that an assessment of China’s economic policies found the RMB exchange rate in 2018 to be “not significantly overvalued or undervalued.”
The IMF’s views on the RMB are at odds with those of its largest shareholder, the United States, which declared China a “currency manipulator” after it allowed the RMB to slip below 7-per-dollar to 11-year lows.
The IMF said in the report that a worsening of trade tensions with the United States could put China’s economic and financial stability at risk, making new fiscal stimulus measures from the government warranted. Daniel said the fund is encouraging China to pursue a more flexible exchange rate with less intervention