The U.S. Treasury on Tuesday said China's currency remained undervalued, but stopped short of labeling the world's second-biggest economy a currency manipulator.

A Treasury official said China had allowed the yuan (also known as the renminbi) to appreciate 9.7 percent in nominal terms since June 2010, in the department's semi-annual currency report.

The Chinese government had also "substantially" reduced its intervention in exchange markets since the third quarter of 2011 and loosened capital controls, the Treasury said in its report, which examines the foreign exchange practices of major U.S. trading partners.

"In light of these developments, Treasury has concluded that the standards identified in (the act on currency manipulators) have not been met with respect to China," it said.

"Nonetheless, the available evidence suggests the renminbi remains significantly undervalued."

CNBC