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The U.S. is reportedly urging China to keep the yuan stable as part of ongoing trade negotiations, but those demands are "superfluous," Mizuho Bank Head of Economics and Strategy Vishnu Varathan said, because the Chinese central bank wants the same thing.
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It's already in China's interest to maintain currency stability as Beijing opens domestic financial markets up to international investment, said Tuan Huynh, emerging markets chief investment officer at Deutsche Bank Wealth Management.
U.S. negotiators are reportedly demanding China not devalue the yuan as a condition for any potential trade deal. Such a measure is likely to encounter little resistance from the Chinese: It's actually in Beijing's interest to have a stronger currency, experts told CNBC.
The yuan's exchange rate against the dollar has been a repeated complaint from Donald Trump . In July of last year, the U.S. president told CNBC that the Chinese currency had been "dropping like a rock" and that it was putting America at a "disadvantage."
Since then, the yuan has strengthened about 1 percent against the greenback and Beijing has said the People's Bank of China is pursuing a stronger currency.
That reportedly hasn't stopped the White House from seeking assurances there'd be no devaluation, but that American pursuit for yuan stability is "superfluous," according to Mizuho Bank Head of Economics and Strategy Vishnu Varathan.
"Fact is, the PBoC is also after a stable CNY," he said, using the three-letter abbreviation for the Chinese yuan (which is also called the renminbi, or RMB).
The world's second-largest economy has been on a drive to open up its financial sector, and has also been pushing for more international use of the yuan . So, it's already in China's interest to maintain currency stability as Beijing opens domestic markets up to international investment, said Tuan Huynh, emerging markets chief investment officer at Deutsche Bank Wealth Management.
"The idea of CNY devaluation as a (mercantilist) strategy is not only outdated, but is also misguided," Varathan said. "Beijing's struggle at the margin is to prevent abrupt and excessive slide in the CNY (brought about by US-China trade risks, which in turn could trigger capital outflows and asset market wobbles)." Editor's note: Varathan included the above parentheses in his emailed comments to CNBC.
"The risk of Beijing engaging in CNY devaluation is an overstated, if not imagined, risk," he said.