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U.S. to press China on currency

By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- U.S. officials will continue to press China over the manipulation of its currency at this week's G-20 summit, a senior Treasury Department official said Tuesday.

The two-day summit of central bank governors and finance ministers, held in Paris, will take place against the background of a recovering world economy.

But the U.S. remains concerned over the impact of Chinese currency policy on other recovering economies, and officials will make the case that China should allow its currency to appreciate at an accelerated rate, the official said.

China has long been criticized by the United States for intervening in the currency market to depress the value of its currency, the yuan. This policy, critics say, gives Chinese exporters an unfair advantage and has created global trade imbalances.

Those imbalances have been amplified in recent months, as food and energy prices soar in developing economies.

While traveling in Brazil last week, Treasury Secretary Tim Geithner, who will attend the G-20 summit, took a thinly veiled jab at China. The massive cash flows into the Brazilian economy are being "magnified" by economies "with tightly controlled exchange rate regimes," he said.

To be sure, China has allowed the yuan to appreciate somewhat. As of late January, the yuan has risen 3.7% against the dollar since the Chinese government loosened its peg in June, according to the Treasury Department.

On Tuesday, a Treasury official acknowledged the progress, but said further action is needed.

"It's an issue where we are seeing progress," the official said. "It's important to continue to engage so that pace continues." To top of page

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