Treasury's Lew To Push Currency Reform On China Visit
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[May 10, 2014]
WASHINGTON (Reuters) - U.S. Treasury
Secretary Jack Lew said on Friday he would press Chinese officials next
week to allow markets to play a bigger role in determining the value of
China's currency, saying there had been "negative movement" in recent
In an interview with Bloomberg Television ahead of his departure
for Beijing on Sunday, Lew said China had taken steps to reform its
exchange rate policy but needed to do more to allow markets to
determine the yuan's value.
"They widened their trading band. But we've seen some very negative
movement in the exchange rate in recent months," Lew said in the
interview to be broadcast Friday evening.
"One of the issues that I'm going to bring to them is if your policy
says that the exchange rate can go up and down, you need to have
market signals determining whether it's going up or down."
The yuan has depreciated in recent months. In April, the Obama
administration warned China, the world's second largest economy,
that the yuan was too weak and expressed doubts over Beijing's
commitment to let market forces determine the currency's value.
In a semi-annual report to Congress, the Treasury stopped short of
declaring China a currency manipulator, but singled it out among
large U.S. trading partners for its exchange rate practices.
A weak yuan makes Chinese exports cheaper for U.S. consumers,
hurting U.S. producers. It also makes foreign goods less affordable
for Chinese consumers.
Lew also said he planned to encourage China to continue its economic
reforms and open its markets.
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In an earlier briefing on Lew's trip, Treasury officials said the
talks also would focus on the need for China to adopt a domestic
consumption-driven economy and protect intellectual property rights.
Lew will hold meetings with Chinese officials on Tuesday.
(Reporting by Lucia Mutikani, Michael Flaherty and Tim Ahmann;
Editing by Paul Simao)
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