WASHINGTON, May 10: China has made “sufficient progress” to introduce exchange rate flexibility now, a US Treasury spokesman said following meetings between Chinese and US financial officials on Monday. Mid-ranking officials from the US finance ministry and the People’s Bank of China discussed subjects including exchange-rate policies and central bank market activities for about two and a half hours, spokesman Tony Fratto said.
US and Chinese financial officials may meet again as soon as this summer in Beijing to discuss non-performing loans in Chinese banks, he said. The United States wants Beijing to relax its currency peg, which links the yuan to the dollar at a rate that foreign critics say gives Chinese goods an unfair advantage on world markets.
Treasury Secretary John Snow told reporters in Hartford, Connecticut, Monday that it was time for China to make the yuan more flexible. That could mean widening the yuan’s peg to the dollar, which for 10 years has been at 8.28.
Snow and other US officials have been repeatedly saying that China is ready to take the next step toward an exchange rate determined by market forces rather than controlled by its central bank. But Fratto said he would not speculate about when China would move to revalue the yuan.—AFP
