China’s vice finance minister says no secret US-China exchange rate deal
BEIJING – China’s vice finance minister said on Tuesday there was no secret agreement between the United States and China regarding adjustments to exchange rates.
The comment by Zhu Guangyao at a forum follows speculation in foreign exchange markets that finance ministers at the recent G20 summit in Shanghai may have reached a tacit understanding in which the United States agreed to allow the dollar to depreciate, relieving pressure on other currencies.
The dollar fell to a five-month low against major currencies last week after the US central bank indicated it would likely take longer to raise interest rates than some had thought.
Zhu also said recent nervous market sentiment did not reflect China’s economic fundamentals, saying the economy will grow at a stable rate, Zhu said. “China has policy (tools) to lead the economy into the right direction,” Zhu said.
Chinese leaders have repeatedly tried to reassure jittery financial markets and China’s major trading partners that Beijing is able to manage the slowing economy, following a slide in the country’s stock market and depreciation of the yuan.
Zhu said the China’s 3 percent budgeted deficit-to-GDP ratio came after careful consideration as the economy faces downward pressure, when asked about a larger fiscal deficit ratio in 2016.
China has budgeted a 2016 deficit of 3 percent of gross domestic product, compared with an actual fiscal deficit ratio of 2.4 percent in 2015. -Reuters