PBOC Slams US Move On Yuan As 'protectionist'

China's central bank said on Tuesday blasted the US step of labelling Beijing as a currency manipulator, describing the move as "wayward unilateralism and protectionist".

The US Treasury Department had on Monday "determined that China is a currency manipulator" – the second major escalation in the two countries' spiralling trade war in just 24 hours.

The People's Bank of China (PBOC) called the designation "wayward unilateralism and protectionist" and said it "seriously undermined international rules".

The yuan exchange rate "is driven and determined by market forces," the central bank said in a statement, adding it is "resolutely opposed to this".

The US action came day after the yuan breached the 7.0 level against the US dollar on Monday, which investors see as a key threshold in the currency's value.

But forex trading on Tuesday was calmer, with the onshore yuan weakening 0.08 percent to 7.0512, and the offshore currency strengthening 0.24 percent to 7.0802.

"Since 2018 the United States has continuously escalated the trade dispute and China has always insisted it will not engage in competitive devaluation," the central bank said.

Allowing the yuan to depreciate makes Chinese exports cheaper and offsets some of the burden of punitive US tariffs that will soon be slapped on nearly all of its goods.

"China has not used the exchange rate as a tool to deal with trade disputes," the statement said.

The yuan's weakening came just days after the US announced plans to raise tariffs on another US$300 billion in Chinese imports, accusing Beijing of failing to live up to commitments in trade negotiations. (AFP)