US Treasury Secretary Geithner delays report on exchange-rate policies

Washington: US Treasury Secretary Timothy F. Geithner has delayed a scheduled April 15 report to Congress on exchange-rate policies, sidestepping a decision on whether to accuse China of manipulating the value of the yuan.

Geithner in a statement on Saturday urged China to move towards a more flexible currency and said a series of meetings over the next three months will be "critical" to bringing policy changes that lead to a stronger, "more balanced" global economy. The delay comes as Chinese President Hu Jintao is scheduled to visit Washington for a nuclear summit from April 12-13.

The Treasury chief faces demands from Congress to label China a currency manipulator for keeping the value of the yuan little changed from about 6.83 to the dollar for almost two years. Geithner is instead betting that China will take steps on its own in the next several months to strengthen its currency, analysts said. "There is pressure within China for a yuan revaluation and, as long as exports continue to rebound, there is a good chance that it will happen," said Elizabeth Economy, director of Asia studies at the Council on Foreign Relations in New York. "If, however, there is a lot of public pressure emanating from the US, that will likely give support to those in the Chinese government who do not want to see a revaluation."

Geithner's statement said countries such as China "with inflexible exchange rates" can promote global growth by "combining policy efforts to strengthen domestic demand with greater exchange-rate flexibility".

"A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing," he said.

Lawmakers from both parties said Geithner is wrong to expect that negotiations will prompt such a move from China's leaders. With the US unemployment rate hovering near a 26-year high, some lawmakers say China's policies give its exporters an unfair advantage over their US competitors.

"We are disappointed, but not surprised, by the administration's decision," said Senator Charles Schumer, a New York Democrat. "After five years of stonewalling, punctuated by occasional, but halting action by the Chinese, we have lost faith in bilateral negotiations on this issue."