China's exchange rate broadly in line with fundamentals

Added On August 11, 2019

After concluding the annual Article IV consultation to review the Chinese economy, the IMF said China's real effective exchange rate (REER) in 2018 is estimated to be at the same level as warranted by fundamentals and desirable policies.
It noted that the average REER in 2018 appreciated by about 1.4 percent relative to 2017, driven by the appreciation in the nominal effective exchange rate.
The IMF report showed that China's current account surplus fell to 0.4 percent of GDP in 2018, and it is projected to remain contained at 0.5 percent of GDP this year.
The IMF executive directors also commended the Chinese authorities' recent reform progress, in particular, in reducing financial sector fragilities and continuing opening-up of the economy.
Experts said IMF's new report provides further evidence that U.S. designation of China as a "currency manipulator" is groundless and irresponsible.