A woman walks past the headquarters of People's Bank of China in Beijing, China.
Jason Lee | Reuters
China's central bank has certainly rejected the US Treasury's designation of Beijing as currency manipulator, saying the accusation has "seriously" undermined international economic order and risked further market turmoil.
The response from the People's Bank of China (PBOC) comes at a time of rapidly intensifying tensions between the world's two largest economies.
On Monday, the US Treasury accused Beijing of deliberately influencing the exchange rate between the yuan and the US dollar to gain an "unfair competitive advantage in international trade."
The move fulfills President Donald Trump's promise to recognize China as a currency manipulator for the first time since 1
The message followed a sharp fall in the yuan against the dollar, with the Chinese currency breaking 7 per dollar level for the first time since 2008.
Late last week, China promised to strike back after Trump vowed to impose 10% tar iffs on $ 300 billion Chinese imports.
"The United States disregards the facts and unreasonably places China with the label & # 39; currency manipulators & # 39; which is a conduct that harms others and themselves," the PBOC said in a statement Tuesday, adding: "The Chinese side strongly opposes this."
The PBOC said that it would not only "seriously undermine the international economic order, but also trigger financial market turmoil. It would also greatly hinder international trade and the global economic boom, And eventually will suffer from it. " Unfair advantage
Even before the formal designation, Trump took to Twitter to voice his opinion, accusing Beijing of manipulating its currency, saying it would" greatly weaken China over time!"
The next step is for the United States to make the case for the International Monetary Fund (IMF), but it is unlikely to result in formal penalties.
The manipulation label is mostly symbolic and means more than a small to one of America's largest creditors and an escalation in the trade war.
The Department of Education's announcement hinged on part of the 1988 federal law that allows the US Treasury to work with the IMF to "eliminate the unfair advantage" associated with currency manipulation.
& # 39; Return to the right track of rationality & # 39;
"This unilateral US action also undermines the global multilateral consensus on exchange rate issues and has a serious negative impact on the stable operation of the international monetary system," said PBOC
"The Chinese side advises the United States to skip the clips and return to the right track of rationality. "
Since the start of the trade war last year, Washington has introduced 25% tariff on US imports from $ 250 billion from China. Beijing retaliated by releasing the billions of dollars of US dollars it buys.
However, in recent months tensions between the two countries have expanded beyond trade and into areas such as technology and security. Specifically, the United States placed Huawei on a blacklist that made it more difficult for the Chinese tech giant to do business with US companies.
– CNBC & # 39; s Thomas Franck and Yen Nee Lee contributed to this report.