February 17, 2006	Friday	Muharram 18, 1427

WASHINGTON, Feb 16: Federal Reserve chairman Ben Bernanke said on Thursday China should take more steps to make its currency flexible and decouple the yuan from the dollar.

The new Fed chairman made the comments in his second day of hearings on Capitol Hill, where he was presenting the semi-annual economic outlook by the US central bank.

“If you are asking me if I would advocate that the Chinese go to greater flexibility in their exchange rate, I certainly would,” Bernanke said in testimony to the Senate Banking panel Thursday.

“It is in their own long-term interest to do so. It will give them more monetary policy independence, it will reduce the over-dependence of their economy on exports” and will allow China to assume a greater leadership role in global economic deliberations, Bernanke said.

China adopted new yuan trading guidelines last July, which allowed the yuan to appreciate from 8.277 to 8.066 against the US dollar. Most of this move was in the one-time 2.1 percent revaluation on July 21.

Bush administration officials have also argued that this move is inadequate.—AFP