China 'moving towards FX rate flexibility'
Beijing, October 24, 2010
US Treasury Secretary Timothy Geithner said China will continue to move toward exchange rate flexibility and is now actively engaged on global foreign exchange issues.
Geithner, in an interview with Bloomberg Television after Group of 20 finance leader meetings concluded here on Saturday, said China views a higher yuan rate versus the dollar as in Beijing's interest because it does not want the US Federal Reserve to control its monetary policy.
"They're an independent country, a large economy. They need the flexibility to run their policies in a way that makes sense for China," Geithner said.
"And that requires that their exchange rate move up over time as they're now doing and we want to see that continue. They've got a ways to go but I think they're committed to do that," he said.
"I think you're going to see them continue to move."
Geithner's comments in the interview came hours before he travelled to Qingdao, China, to meet with Chinese Vice Premier Wang Qishan to discuss unspecified bilateral economic matters.
The US Treasury chief has delayed a decision on whether to declare that China manipulates its currency for export advantage. Global economists and US lawmakers contend that China's yuan is at least 20 percent undervalued.
The semi-annual Treasury currency report was due on Oct 15, but Geithner opted to delay it in order to press his case at multilateral meetings, including Gyeongju and a Nov 5-6 G20 leaders summit in Seoul.
At the Gyeongju meeting in southeastern Korea, the G20 members pledged to shun competitive currency devaluations and reduce current account imbalances, though they stopped short of numerical goals based on percentages of gross domestic product.
Geithner said it was significant that the G20 directly addressed currencies with cooperation from China and other key emerging markets. - Reuters