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Special> Global Financial Crisis> Latest
UPDATED: April 16, 2009
U.S. Says No Major Trading Partner Manipulating Exchange Rate
U.S.: no major trading partner found to be manipulating its exchange rate to gain unfair advantage

The U.S. government said on Wednesday that no major trading partner had been found to be manipulating its exchange rate to gain unfair trade advantage.

The government "did not find that any major trading partner had manipulated its exchange rate for the purpose of preventing effective balance of payments adjustment or to gain unfair competitive advantage," Treasury Secretary Timothy Geithner said in a statement upon the release of the department's semi-annual report to Congress on International Economic and Exchange Rate Policies.

The report came after Geithner was reported to have said during his Senate confirmation hearings earlier this year that U.S. President Barack Obama believed China was manipulating its currency.

On Wednesday, Geithner said that the U.S. government's conclusion that China, which has been highlighted in the report in recent years, does not manipulate its exchange rate is based on the following factors.

First of all, China has taken steps to enhance exchange rate flexibility.

And the Chinese currency appreciated by 16.6 percent in real effective terms between the end of June 2008 and the end of February 2009.

Meanwhile, statistics suggest the pace of China's foreign exchange reserve accumulation slowed in the fourth quarter of last year.

In addition, China has enacted a large fiscal stimulus package, which should help spur domestic growth and rebalance the Chinese economy.

However, Geithner said that the Treasury Department remains of the view that the renminbi is undervalued.

According to the secretary, the report focuses on the economic, financial and exchange rate impacts of the ongoing financial crisis on the U.S. economy, and more broadly the global economy.

The period examined is the second half of 2008, but where appropriate information up to the end of March 2009 is included.

(Xinhua News Agency April 16, 2009)

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