US envoy coming as Yuan hits four-month low
Beijing (AsiaNews/Agencies) – China’s yuan dropped to 6.83 yuan per dollar, a four-month low, so that Chinese exports to the United States can pick up again, after a six month slump, right on the eve of the first visit by the new US Treasury Secretary Timothy Geithner, which starts on 31 May.
“China lowered the reference rate before Geithner’s visit to make him aware of the need to weaken the yuan to protect exporters,” Yang Shengkun, a currency analyst, told Bloomberg.
The yuan slumped 0.7 percent on 1 December, three days before Geithner’s predecessor Henry Paulson came to the Chinese capital for trade talks.
Chinese exports fell 17 per cent in April as recessions in the US, Europe and Japan battered demand. China’s central bank has however kept yuan appreciation in check.
Last week Geithner said that the United States would urge China to let the yuan appreciate, even after the currency rose 21 per cent since a peg to the dollar was ended in July 2005. For US monetary authorities the yuan is still undervalued.
China’s government said on 14 May that such a measure would harm global trade.
As of March of this Chinese investors held US$ 768 billion in US Treasuries, making China the United States’ biggest creditor in the world.
Back in March Premier Wen Jiabao asked the Washington “to maintain its good credit, to honour its promises and to guarantee the safety of China’s assets.”
.png)
