Geithner knocks China on currency rate

Feb. 19, 2011 at 2:19 PM
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PARIS, Feb. 19 (UPI) -- U.S. Treasury Secretary Timothy Geithner at a Group of 20 summit in Paris said China was too slow in allowing its currency to appreciate.

Geithner said the renminbi was "substantially undervalued," The New York Times reported Saturday.

"Its real effective exchange rate -- the best measure to judge its currency against its trading partners -- has not moved much in this latest period of exchange rate reform," Geithner said.

Geithner warned China the low exchange rate prompts inflation in China and contributes to the trade imbalance, the Times said.

Inflation in China also pushes up food prices, which analysts say has contributed to the recent social unrest in the Middle East.

The G20 nations, with France and Germany persuading China to go along, agreed on a method to measure whether economic imbalances between countries disrupt the world economy.

Dominique Strauss-Kahn, director of the International Monetary Fund, said, "Asia is doing well, Latin America and Africa, too. But unemployment is still very high in advanced economies."

"So this recovery won't deliver sustainable growth," he added.

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