There is a close connection of value of currency and exchange and international trade as money is the media of all the trade and business. A good currency culture ensures a better growth of the international trade. A flourishing trade environment further ensures development and prosperity among the participants. But when it comes to regulate the exchange rate, the parties (governments) rely more upon diplomacy and politics which is not a sign of a good international trade culture. The existing laws relating to currency manipulations are insufficient to deal with the various maneuvers of the parties in the field of currency and exchange. This paper is an appraisal of underlying intricacies of the legal regime of currency manipulations and competitive devaluation.

There is a close nexus between international trade law and exchange rates of the States. In order to ensure a lawful international trade regime in the world, it is imperative to adopt a good economic policy for all the participants of the trade. A good economic policy, which includes a good currency culture, ensures not only prosperity within the economy but also peace and stability in the world. It is not a surprise that the preamble of the World Trade Organization stresses upon the trade and economic endeavors which infuse stability and sustainable development.

There are three dimensions of economic relations in international laws between two states: trade, money and investment. These relations can be cooperative, conflicting or non-existent. In the latter case, the state retrenches to an inward-looking economic policy of isolationism and protectionism. Conflicts of any sort are unavoidable; however, the existence of a rule-based framework for the resolution of international economic conflicts can help promote cooperation. If such a framework does not exist, or if it is not respected, economic conflicts will either lead to the deterioration (or rupture) of economic relations between the states involved, or will turn into a political conflict, with the possibility of severance of diplomatic ties or, even worse, of a military backlash.

Law Review Journal, Currency War, International Trade Law, Currency Manipulation, The US-China Dispute, International Monetary Fund (IMF), International Bank for Reconstruction, Development (IBRD), International Trade Organization (ITO), Chinese Currency, Legal Perspective.