Treasury Secretary Jack Lew issued a warning to China Wednesday, saying that the Chinese government has to be more open about its exchange rate policies.
“They need to understand that they signal their intentions by the actions they take and they way they announce them,” Lew said in an interview with CNBC that aired Wednesday afternoon.
“They have to be very clear that they’re continuing to move in a positive direction,” Lew said, “and we’re going to hold them accountable.”
The People’s Bank of China has devalued its currency in recent weeks by changing the reference rate around which it permits the yuan to be traded within a certain range.
The Chinese government has said the move was intended as a step toward having the market set exchange rates.
Since the devaluation comes amid massive tumult in China’s stock markets and questions about its pace of economic growth, though, investors have suggested that the devaluation might have been an attempt by the Chinese government to boost its economy at the expense of its trading partners by cheapening its currency.
Concerns over possible Chinese currency manipulation have grown as market volatility has surged throughout the world in recent weeks, including in the U.S.
“There’s an economic and a political reality to things like exchange rates,” Lew said in the brief interview, in which he did not offer an explanation as to how the U.S. would hold China accountable.
Lew is scheduled to travel to Ankara, Turkey, this week for the G-20 meeting of finance ministers and central bankers. Chinese officials also will attend.
