Geithner urges China to resume exchange rate reform
US Treasury Secretary Timothy Geithner urged China on Saturday to let the yuan appreciate as a critical part of its economic reforms.business Updated: Jun 05, 2010 18:54 IST
US Treasury Secretary Timothy Geithner urged China on Saturday to let the yuan appreciate as a critical part of its economic reforms.
Geithner, speaking after a Group of 20 finance ministers' meeting, said the grouping had discussed "a more flexible exchange rate policy" in China.
He said revaluing the yuan was an important part of wider economic reforms pursued by Beijing to make its economy less dependent on exports and drive up domestic demand.
"China has laid out very ambitious reforms designed to help strengthen growth in household income, consumption growth and to strengthen domestic demand," he said.
"A necessary part of that reform is to resume reform of their exchange rate mechanism."
In a communique following the two-day meeting, the G20 warned that market convulsions sparked by Europe's debt crisis posed major challenges to the global economy. They did not single out specific currencies for mention.
Critics of China's currency policy say Beijing keeps the yuan artificially low to make the country's exports cheaper than those of rivals.
Speculation had grown in recent months that China was ready to allow a gradual yuan appreciation. Analysts say that now looks unlikely because the government will seek exchange rate stability as the European sovereign debt crisis rages.