IMF reiterates China's exchange rate broadly in line with fundamentals

IMF reiterates China's exchange rate broadly in line with fundamentals

The trade war between China and the United States is continuing and has hit market sentiments once more, after President Trump said that the USA was not ready to make a deal with China.

Since past year, the PBoC came up with a group of researchers to establish a prototype that would aid the creation of the digital Yuan.

"We'll see whether or not we keep our meeting in September", he told reporters.

The US economic cycle is the longest in history, and the last time China's yuan was allowed to fall to this level was in the midst of the Great Recession. China wants to make a deal so badly.

Relations have soured further in the past week after Trump announced a new round of punitive tariffs on Chinese goods, despite a truce agreed with President Xi Jinping in May, and Beijing responded by halting all purchases of U.S. agricultural goods. Monday was the worst day of the year for the three stock benchmarks.

"I'm not ready so fast", said the sweating president as he took questions for a half-hour under an intense early August sun, notably striking - again - a much more pessimistic tone after years of promising a trade pact with Beijing.

The latest salvo in the ongoing trade war came after China halted all purchases of US farm and agriculture products. According to reports by Reuters, the bank send a note to its clients that it expects a new round of tariffs to go into effect on an additional $300 billion of Chinese goods, and that the trade war is increasing recession fears.

As The Hill reported, More than 50 percent of respondents in a new survey say they will not vote for President Trump when he seeks reelection in 2020.

The US has also tangled with Chinese tech giant Huawei, which was added to a US trade blacklist in May over concerns of intellectual property theft and spying.

But a two-day meeting in Shanghai at the end of July failed to yield any significant purchases by China nor progress on USA demands for changes to intellectual property, technology transfer and subsidy policies, prompting Trump to announce his next round of tariffs.

Last week, The People's Bank of China (PBOC) set the official reference rate of the yuan at 7.0039 yuan per dollar, marking the lowest level since 2008.

According to Changchun, the currency has been in the research and development phase since 2014.

With the United States still benefiting from the post-WWII financial environment and Bretton-Woods, Washington remains the world's monetary hegemon, routinely punishing its adversaries by cutting off access to the crucially needed dollar-based global financial system to get its way.

The US this week labelled China a currency manipulator, which may prompt counteractive measures. And I really made the decision.

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