Geithner Delays Exchange Rate Policy Report

In a move intended to give China more leeway with its exchange rate policy, U.S. Treasury Secretary Timothy F. Geithner will delay a report expected by Congress on April 15th. The report is a critical look at exchange rate policies of foreign governments and there has been increasing pressure on the U.S. Treasury to officially list China as a currency manipulator.

In his statement announcing the delay, Geithner urged China to adopt a more “flexible” exchange rate policy, arguing that this would lead to a “more balanced” global economy. An expert in Chinese / American relations however, cautioned against the U.S. government being overly forceful in demanding an appreciation in the value of the Chinese currency.

“There is pressure within China for a yuan revaluation and, as long as exports continue to rebound, there is a good chance that it will happen,” said Elizabeth Economy, director of Asia studies at the Council on Foreign Relations in New York. “If, however, there is a lot of public pressure emanating from the U.S., that will likely give support to those in the Chinese government who do not want to see a revaluation.”

Source: Bloomberg

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