Geithner: China Should Let Yuan Appreciate Faster
Treasury Secretary Timothy Geithner said that China should let its yuan currency appreciate faster to demonstrate that the country is willing to follow through on promises.
"Frankly they haven't let the currency move very much so far," Geithner told Bloomberg News. "They know they're just at the beginning of that process and I think we'd like to see them move more quickly."
The yuan has strengthened by less than 1% against the U.S. dollar since China pledged greater flexibility in June.
A weaker yuan makes Chinese exports more competitive. With the U.S. Commerce Department expected to report a trade deficit of tens of billions of dollars for July, the yuan is becoming an increasingly political issue.
"The deficit number inevitably gives the U.S. Congress more ammunition to vent its frustration at China's currency stance," Donna Kwok, an economist at HSBC told Bloomberg News. "The renminbi issue is becoming increasingly political."
The yuan traded at 6.7870 per dollar at 12:35 p.m. Hong Kong time. From July 2008 until June 2010, authorities maintained a peg of 6.83 yuan per dollar.