Geithner: China 'going to move' on currency rates

09:13, April 14, 2010      

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U.S. Treasury Secretary Timothy F. Geithner said China is likely to move toward a more flexible currency because its practice of pegging the yuan to the dollar limits that nation 's ability to conduct monetary policy, the Bloomberg News reported Tuesday.

"As a strong, large, independent, growing economy, it doesn 't make sense for that country to run a monetary policy exchange-rate regime that effectively lets the (U.S.) Federal Reserve set interest rates for their economy," Secretary Geithner said at an American Society of News Editors conference in Washington on Tuesday.

"That 's why I think -- why I 'm confident that they 're going to move," Geithner said.

Secretary Geither has visited Beijing and conducted a meeting with Chinese vice-premier Wang Qishan at the Beijing International Capital Airport on currency issues.

U.S. President Barack Obama on Monday urged President Hu Jintao at a Washington nuclear security meeting to move to a "more market- oriented" exchange rate. The Xinhua News Agency cited President Hu as saying the country wouldn 't move under utside "pressure."

Separately, New York University economist Nouriel Roubini said China would allow its currency to start appreciating gradually, possibly starting as early as May, said the Bloomberg News report.

Roubini said China would limit the yuan 's appreciation to a maximum of 3 percent or 4 percent a year due to the economic slowdown there. The move would be enough to allow the Obama administration to say its efforts were paying off, he said in an interview today on Bloomberg Television 's "InBusiness with Margaret Brennan."

"It 's not at all a game changer, absolutely, but politically that 's the maximum that China can do," Roubini, who predicted the global financial crisis, said in New York. The move would "allow at least the U.S. to signal there is some movement and prevent the U.S. from declaring China as a currency manipulator."

People's Daily Online


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