(Yicai Global) May 18 -- The real and nominal effective exchange rates of the Chinese yuan both rose slightly in April, while disproving US President Donald Trump's accusations about China's alleged currency manipulation, which would boost its exports' competitiveness.
The real effective exchange rate (REER) rose 0.30 percent to 126.24 in April, reported the Bank for International Settlements, an international financial institution owned by central banks, adding that the nominal effective exchange rate (NEER) exchange rate rose 0.91 percent to 123.09 that month, showing an upward direction for the fourth consecutive month.
China will not devaluate the yuan to cope with trade tensions with the United States, People's Bank of China governor Yi Gang said at Boao Forum for Asia on April 11, despite reports China was evaluating the potential impact of a gradual yuan depreciation.
"Russia and China are playing the Currency Devaluation game as the US keeps raising interest rates. Not acceptable!" President Trump tweeted on April 16.
The world's two largest economies have proposed additional tariffs worth USD250 billion on each other's imports as part of an ongoing trade spat. Reducing the yuan's value would make the Asian country's exports to the US cheaper and thus more competitive.
The REER has risen 3.84 percent this year and the NEER has increased 4.48 percent. China allowed its yuan to rise 6.8 percent against the US dollar last year.
The REER is the weighted average of a country's currency in relation to an index or basket of other major currencies, adjusted for the effects of inflation. The NEER refers to the unadjusted exchange rate.
The Bank for International Settlements is an international financial institution which aims to promote global monetary and financial stability.
Editors: Emmi Laine, William Clegg