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China's exchange rate move 'positive' for global growth: US

US Treasury Secretary Timothy Geithner welcomed China's exchange rate flexibility move today, which he said would make a "positive contribution" to global growth once implemented.

world Updated: Jun 19, 2010 20:27 IST

AFP
Hindustantimes
         

US Treasury Secretary Timothy Geithner welcomed China's exchange rate flexibility move today, which he said would make a "positive contribution" to global growth once implemented.

"We welcome China's decision to increase the flexibility of its exchange rate," Geithner said in a statement.

"Vigorous implementation would make a positive contribution to strong and balanced global growth."

The United States, through the administrations of President Barack Obama and his predecessor George W Bush, has long stressed that China keeps its yuan undervalued.

US lawmakers insist it is being used by Beijing to gain an unfair trade advantage, making Chinese exports cheaper and ballooning Washington's trade deficit with Beijing.

Earlier this month, Geithner, under fire for delaying a Treasury report to Congress due in April that could have labelled China a currency manipulator, said Beijing's refusal to revalue its currency impeded global economic reforms.

But today, he sounded a note of optimism about China's move.

"We look forward to continuing our work with China in the G20 and bilaterally to strengthen the recovery," he said.

Amid growing pressure on Beijing to strengthen its currency, China's central bank earlier said it would further promote reform of its exchange rate mechanism, but maintained there was no basis for "large swings" in the currency.

First Published: Jun 19, 2010 20:22 IST

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