10 Oct 2010

China urged by US to let yuan rise in value

2:15 pm on 10 October 2010

US Treasury Secretary Timothy Geithner is again pressing China to let the value of the yuan rise against other currencies.

At a meeting of the International Monetary Fund in Washington, Mr Geithner said countries relying too much on exports must change their policies, or global economic growth will slow.

He said major emerging economies should move towards "a more flexible, market-oriented currency policy".

In response, China blamed rich nations for problems in the currency markets that have hit many developing nations.

Mr Geithner renewed the pressure on China to allow its currency to rise.

The BBC reports he named no names, but was talking mainly about China.

The United States has a long-standing grievance over China's currency policy, which limits the movement of the yuan against the dollar.

The American complaint is that it gives Chinese exporters an unfair competitive advantage.

There was a vigorous response from Shou Xiaochuan, governor of the People's Bank of China, who blamed rich countries for problems in the currency markets.

Mr Zgou said extremely low interest rates in rich countries had created "stark challenges for emerging market countries".


The BBC reports China has stopped its currency rising much by buying foreign currency.

If it were to refrain from that and allow the yuan to rise, it would probably help other developing countries that compete with China, as well as the US which is protesting the most.