US President Barack Obama will continue to press China for a “market-based” valuation for its currency – even after the first indications that the yuan may be again allowed to freely float emerged.
Obama will discuss the Chinese currency’s two-year dollar-fix with Hu Jintao, China’s President, when the two men meet next Monday. Obama’s spokesman said the yuan’s value is “of great concern to a number of economies around the world”.
The comments come after the US postponed publication of a document which could have branded China as a currency manipulator and after Tim Geithner, Treasury Secretary, said: “This is China’s choice”.
Although facing pressure from the US Congress to act over the impact the fix has on the US-Sino trade deficit, the Obama administration seems to have adopted a “softly softly” approach towards the Beijing authorities.
Meanwhile, in the first sign that Beijing may allow the yuan to float higher, a Chinese government economist said the daily trading band for the yuan could widen.
However, Ba Shusong, of the Financial Research Institute, said the move would be dependent on economic recovery in both China and the US.
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