Accessibility links

US Treasury Says China Not Manipulating Currency

U.S. Treasury Secretary Timothy Geithner has declined to name China as a currency manipulator - a position that is in contrast to the government's stance in January.

In the Treasury Department's semi-annual report on the currency practices of key trade partners, Mr. Geithner says there is no evidence that any major U.S. trading partner had manipulated its exchange rate. The findings are in a report submitted to Congress Wednesday.

During his January confirmation hearing, Mr. Geithner said that President Barack Obama believed China was "manipulating" the value of its currency to gain unfair trade advantages.

However, in the new report, he says China has taken steps to "enhance exchange rate flexibility." He also says the Chinese currency "appreciated" by more than 16 percent between June 2008 and February 2009.

U.S. politicians, labor leaders and manufacturers have long complained that China intervenes in foreign exchange markets to keep the value of its currency artificially low. The move would give Chinese products a price advantage on world markets.

In the new report, Mr. Geithner also says "virtually every advancing economy and many emerging markets are in recession."

He also says many currencies depreciated against the dollar in the second half of 2008 and into 2009.