US Treasury Secretary Timothy Geithner on Thursday said major world currencies were “roughly in alignment” and called on Group of 20 finance leaders to agree to “norms” on exchange rate policy.
Laying out his agenda for this weekend's G20 meetings in South Korea , Geithner said in a Wall Street Journal interview he would seek numerical targets for “sustainable” trade surpluses and deficits as a way to help rebalance the global economy.
He is hoping that by persuading major emerging and advanced economies to cooperate on foreign exchange policies, he can coax China into allowing the value of its yuan to rise further.
“Right now, there is no established sense of what's fair”, said Geithner.
“We would like countries to move toward a set of norms on exchange rate policy,” he added.
Geithner also sought to provide some reassurances that the United States is not deliberately trying to devalue its dollar.
The Journal said that in the interview he suggested that he saw little reason for the dollar to sink further against the euro and the yen, saying that these “major currencies” were “roughly in alignment now.”
While past G20 meetings avoided direct confrontation on thorny exchange rate issues, the meetings starting on Friday in Gyeongju are expected to address the problem head-on. The dollar's protracted slide and China's tightly controlled trading band for the yuan have put upward pressure on other emerging market currencies that are allowed to move more freely.