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The International Monetary Fund (IMF) confirmed on Friday that the value of the Chinese yuan was broadly in line with economic fundamentals, but one official said the IMF was encouraging Beijing to adopt a more flexible exchange rate while minimizing monetary intervention.
An badessment of Beijing's economic policies revealed that the yuan exchange rate in 2018 was "not overvalued or substantially undervalued," said James Daniel, director of China's IMF department.
The IMF's views on the yuan differ from those of the United States, the largest shareholder in the world, who said this week that China was a "currency manipulator" after letting the yuan fall below 7 yuan relative to the dollar.
US Treasury Secretary Stephen Mnuchin is seeking to contact the IMF to help correct an "unfair" trade advantage stemming from Beijing's monetary measures, but Daniel has refused to disclose the IMF's response to the request.
"Our discussions with the US Treasury are continuing on a wide range of topics," Daniel told reporters during a conference call.
"The IMF report shows that there is no manipulation of the currency and that China's external balance was appropriate," Jeffrey Sach, an adviser to the UN, told Xinhua. Professor of Economics Renowned at Columbia University.
"The US Treasury's statement that China is a currency manipulator was patently arbitrary and politically flagrant and relied on Trump's tweets rather than an objective badysis," Sach said.
At the same time, the IMF warned on Friday that China may need new fiscal stimulus if trade tensions with the US worsen, jeopardizing economic and financial stability.
China should open more sectors to foreign competition in order to put its economy in the best position to deal with trade pressures, said the UN advisor.
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