The United States said Friday that China's currency remains "significantly undervalued" but Beijing's policy was not manipulating the yuan to gain an unfair trade advantage.
The US Treasury Department said it had concluded that China had not met the standards for manipulation but would continue to closely monitor the pace of appreciation of the yuan, or renminbi.
"The available evidence suggest the RMB remains significantly undervalued, and we believe further appreciation of the RMB against the dollar and other major currencies is warranted," the Treasury said in its semi-annual report to Congress on exchange rates.
The Treasury explained that the decision to not brand China a currency manipulator was based in part on the yuan's appreciation against the dollar since June 2010 and a decline in its massive current account surplus.
It also cited "China's commitments in the G20 and the US-China Strategic & Economic Dialogue to move more rapidly to a more market-determined exchange rate system."text here