Friday, February 17, 2006
Snow hints at China currency manipulation
FT.com
John Snow, US Treasury secretary, gave another strong hint on Thursday that his department was likely to formally accuse China of being a “currency manipulator�, saying the new exchange rate regime Beijing introduced last summer has not led to greater currency flexibility.
During a visit to the Chicago Mercantile Exchange, Mr Snow said China had made little progress towards a more flexible exchange rate after it introduced a currency regime last summer, and that this would influence the Treasury’s next report on trade and exchange rates.
“We haven’t seen much movement towards grater flexibility and certainly that would weigh on our determination,� Mr Snow said.
Last July, China revalued the renminbi by 2 per cent and broke its decade-long exchange rate peg to the dollar, linking it to a basket of currencies. At the time, the Treasury welcomed the move and said it would allow a shift to greater currency flexibility over time. But since the announcement, the renminbi has risen less than 1 per cent against the dollar.
John Snow, US Treasury secretary, gave another strong hint on Thursday that his department was likely to formally accuse China of being a “currency manipulator�, saying the new exchange rate regime Beijing introduced last summer has not led to greater currency flexibility.
During a visit to the Chicago Mercantile Exchange, Mr Snow said China had made little progress towards a more flexible exchange rate after it introduced a currency regime last summer, and that this would influence the Treasury’s next report on trade and exchange rates.
“We haven’t seen much movement towards grater flexibility and certainly that would weigh on our determination,� Mr Snow said.
Last July, China revalued the renminbi by 2 per cent and broke its decade-long exchange rate peg to the dollar, linking it to a basket of currencies. At the time, the Treasury welcomed the move and said it would allow a shift to greater currency flexibility over time. But since the announcement, the renminbi has risen less than 1 per cent against the dollar.
