China’s renminbi was the eighth most-used currency for payments in terms of value last month.
The currency of the world’s most populous country jumped 12 spots from January 2012, when it was the 20th most-used currency for payments, according to the SWIFT RMB Tracker.
Many U.S. lawmakers and manufacturers watching China’s currency say the government’s officials “manipulate” the renminbi (RMB) to make Chinese exports to the U.S. less expensive and American exports to China more expensive.
The Chinese currency remains “significantly undervalued,” the Treasury Department said in a report last October that nonetheless “declined to name China or any major trading partner a currency manipulator,” as Bloomberg’s Ian Katz and Kasia Klimasinska reported at the time.
Under a 1988 law, the Treasury Department provides semiannual reports on the exchange-rate policies of major U.S. trading partners, including China, to determine whether nations manipulate their currencies to gain an unfair advantage in trade.
Supporters of congressional action to address China’s currency “contend that the RMB remains significantly undervalued against the dollar and that pressure needs to be applied to China to induce it to adopt a more market-based currency regime,” according to a Jan. 23 Congressional Research Service report.
“Opponents argue that such legislation, if enacted, would likely have little impact on the U.S. economy, would worsen trade relations with China, and could later be found to be inconsistent with U.S. WTO commitments,” the report said.
In 2010, a Democratic-controlled House passed a currency-manipulation bill, though the Senate didn’t act on it, as Bloomberg Government has reported. In 2011, the Democratic-run Senate passed a bill that the Republican-led House didn’t consider, according to BGOV.
“China’s national interests will converge with the rest of the world as its economy grows, and policy makers there shouldn’t be ‘browbeaten’ for managing their currency in the meantime,” Goldman Sachs Group Inc. CEO Lloyd Blankfein said Jan. 23 in Davos, Switzerland.
For more, see this story by Bloomberg’s Michael J. Moore.