US Treasury Sec. Geithner to Visit China, Discuss Yuan

Updated On: Apr 08, 2010

United States Treasury Secretary Timothy Geithner is visiting the Chinese Vice Premier Wang Qishan in Beijing this week to discuss China’s policy on keeping its currency (the yuan) at a fixed exchange rate. Just a few days back, Washington delayed a report to Congress on foreign exchange rates well past the April 15th deadline a possible signal that relations are becoming more cordial.

From 2005 to 2008, China’s central bank appreciated the yuan by 20% against the dollar. Recently, China re-pegged the Renminbi at 6.827; the strongest in a year. But it has yet to be revalued since the onset of the financial crisis, perhaps in order to protect exporters. According to most economists, the yuan is somewhere between 20% and 40% undervalued.

According to a White House representative, President Obama will also raise the currency issue with President Hu Jintao at the nuclear security summit meetings in Washington DC next week.

China’s economic policy department- the National Development and Reform Commission (NDRC) said that they would keep a check on exchange rates and that Beijing is moving towards a more ‘flexible yuan’. In a meeting in India last week, Geithner said that the yuan would take a broader international role, calling that a "healthy, necessary adjustment."

China hints at readiness to let Yuan rise 
[ Reuters, 7 April 2010]
Geithner plans China side trip [ CNN, 7 April 2010]
Geithner to visit China, in Sign of Warming Relations [ The New York Times, 7 April 2010]

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