China considers that depreciation of the yuan is not in its interest: Mnuchin

NUSA DUA, Indonesia (Reuters) – US Treasury Secretary Steven Mnuchin said Saturday that Chinese officials had told him this week that a further depreciation of the Chinese currency, the yuan, was not in the interest of the country.

Mnuchin also said at a press conference that he "had no doubts" about the prospect that China could sell the US Treasury debt in a context of growing trade tensions between the two countries. two largest economies in the world.

"We had productive conversations and they stressed that it was not in their interest to see the RMB continue to depreciate," Mnuchin said at the annual meetings of the International Monetary Fund and the World Bank in Bali.

"And as I said, the currency issue is an important issue for us in the trade and will be part of our trade discussions. We want to make sure that depreciation is not used for competitive purposes in commerce. "

These comments came after Mnuchin expressed his concern over a weakening of the yuan against the dollar, almost to a level not seen in ten years, as the Treasury prepares to publish a much-awaited report next week on the monetary manipulation.

Mnuchin said that no decision had been made as to whether US President Donald Trump would meet with Chinese President Xi Jinping at the G20 leaders summit in Argentina in late November. Since August 23, no formal negotiations to try to resolve the trade dispute between the United States and China have taken place.

"To the extent that we can progress to a meeting, I encourage that, and this is something we are discussing. For the moment, there are no prerequisites, the president will decide. "

Mnuchin said he is not worried that Chinese assets worth $ 1.17 trillion could not be sold despite trade tensions.

"The Treasury market is very liquid. This was never discussed in our discussions. I hope they think it's good to hold US holdings, US dollars and US Treasury bonds. "

Mnuchin also reiterated his support for an independent Federal Reserve, despite President Trump's persistent criticism of Fed rate hikes.

He said he would not comment on the Fed's policy, but added that it was Trump's "prerogative" to express his views on US interest rates.

"The president made it clear that he wanted lower rates, as opposed to higher rates, and that he was concerned that if the Fed raised rates too quickly, it could have an impact on our growth. ", said Mnuchin, adding that he did not see inconsistencies between his views and those of the president.