China is pushing back hard against US claims that it's manipulating the currency to gain a competitive trade advantage, and is accusing the US of escalating the trade war.
It said Monday's devaluation reflected pressure on the exchange rate stemming from the US decision last week to impose new tariffs on Chinese exports.
In a statement late Monday, the People's Bank of China Governor Yi Gang responded to accusations that the country is working to devalue the yuan, saying:
As a responsible big country, China will abide by the spirit of the G20 leaders’ summit on the exchange rate issue, adhere to the market-determined exchange rate system, not engage in competitive devaluation, and not use the exchange rate for competitive purposes and not use the exchange rate as a tool to deal with external disturbances such as trade disputes."
On Tuesday, in its third statement in the past two days, the PBOC expressed deep regret that the US had labeled China as a "currency manipulator."
"It’s willful unilateralism and protectionism.
It’s a serious violation of international standards and will have a major impact on global economic and financial conditions.
Since 2018, the US has kept escalating the trade dispute.
[But] China has always adhered to not engaging in any competitive devaluation. China didn’t, and will not, use the exchange rate as a tool to deal with trade disputes.
The US has ignored the fact and labeled China a currency manipulator. It will harm itself and also harm others. China is resolutely opposed to that."