HR 692119th CongressIn Committee

China Exchange Rate Transparency Act of 2025

Introduced: Jan 23, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The China Exchange Rate Transparency Act of 2025 would require the U.S. Secretary of the Treasury to direct the United States Executive Director (U.S. IMF E.D.) at the International Monetary Fund (IMF) to push for greater transparency from the People’s Republic of China (PRC) on its exchange rate policies. The bill focuses on improving data and surveillance of China’s exchange rate management, including potential offshore RMB market activity conducted by Chinese financial institutions or state-owned enterprises. It also directs attention to any divergences between China’s exchange rate policies and those of other major currency issuers during IMF Article IV consultations, and it calls for stronger consideration of China’s role as a “responsible stakeholder” when IMF governance bodies assess its quota and voting shares. The measure includes a sunset provision that ends the act either 30 days after the U.S. IMF Governor reports substantial compliance by China with IMF obligations, or after seven years—whichever comes first. The bill does not allocate new funding or create new programs; it is a policy directive aimed at IMF engagement and surveillance.

Key Points

1The Secretary of the Treasury must instruct the U.S. IMF Executive Director to advocate for increased transparency from China about its exchange rate arrangements, including any indirect interventions in the foreign exchange market through Chinese financial institutions or state-owned enterprises, and to support enhanced IMF surveillance.
2During IMF Article IV consultations with China, the U.S. E.D. is to push for the inclusion of any significant divergences between China’s exchange rate policies and those of other major currency issuers used in determining Special Drawing Rights (SDR) values.
3In IMF governance reviews, the act directs stronger consideration of China’s performance as a “responsible stakeholder” when evaluating its quota and voting shares.
4The directive is to be carried out through the voice and vote of the United States, i.e., it relies on U.S. influence within the IMF rather than creating new U.S. government programs.
5Sunset provision: the act expires 30 days after the earlier of (a) a U.S. IMF Governor report that China is in substantial compliance with IMF obligations and aligned with other issuers on exchange rate practice, or (b) seven years after enactment.

Impact Areas

Primary group/area affected- U.S. Treasury and the U.S. IMF Executive Director: changes in advocacy posture and surveillance emphasis toward China’s exchange rate policies; potential procedural shifts in Article IV consultations and IMF governance discussions.Secondary group/area affected- China’s monetary and exchange rate policy environment: increased scrutiny and expectation of greater transparency on data related to exchange rate management, offshore markets, and interventions.- IMF governance and surveillance: potential for enhanced emphasis on China’s compliance and its impact on IMF quota/voting discussions.Additional impacts- Global financial markets and SDR framework: clearer signaling on how IMF reviews treat China’s exchange rate policies; potential shifts in perceptions of China’s consistent participation in the international monetary system.- U.S.-China relations: policy action framed as a U.S. push for transparency could influence diplomatic and economic discussions, depending on responses from China and other partners.- International monetary system credibility: by promoting transparency, the measure could affect assessments of how orderly and predictable China’s exchange rate management is perceived to be by other major economies.

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