Treasury Delays Currency Report, Blames China
It's getting old now, Timmy. The blaming China thing was cute for a minute but it's a really tired parlor trick and even though Congress couldn't punch their way out of a wet paper bag, it's still fair to provide the currency report on our own dollar as promised instead of using China as an excuse to delay the information. Anyone else buy this?
U.S. Treasury Secretary Timothy F. Geithner delayed a scheduled April 15 report to Congress on exchange-rate policies and urged China to move toward a more flexible yuan.
Geithner said a series of meetings over the next three months, including a Washington visit this month by Chinese President Hu Jintao, will be “critical” to bringing about policy changes that lead to a stronger and “more balanced” global economy.
Geithner's (not surprising) comments are as follows:
April 3, 2010
Statement of Treasury Secretary Geithner On the Report to Congress on International Economic and Exchange Rate PoliciesI have decided to delay publication of the report to Congress on the international economic and exchange rate policies of our major trading partners due on April 15. There are a series of very important high-level meetings over the next three months that will be critical to bringing about policies that will help create a stronger, more sustainable, and more balanced global economy. Those meetings include a G-20 Finance Ministers and Central Bank Governors meeting in Washington later this month, the Strategic and Economic Dialogue (S&ED) with China in May, and the G-20 Finance Ministers and Leaders meetings in June. I believe these meetings are the best avenue for advancing U.S. interests at this time.
As part of the overall effort to rebalance global demand and sustain growth at a high level, policy adjustments are needed that measurably strengthen domestic demand in some countries and boost saving in others. These are also important to ensure robust job growth. In the United States, private savings has increased, the current account deficit has fallen, and the President has outlined a series of measures to reduce our fiscal deficit.
Countries with large external surpluses and floating exchange rates, such as Germany and Japan, face the challenge of encouraging more robust growth of domestic demand. Surplus economies with inflexible exchange rates should contribute to high and sustained global growth and rebalancing by combining policy efforts to strengthen domestic demand with greater exchange rate flexibility.
This is especially true in China. China's strong fiscal and monetary response to the crisis enabled it to achieve economic growth of nearly 9 percent in 2009, contributing to global recovery. Now, however, China's continued maintenance of a currency peg has required increasingly large volumes of currency intervention. Additionally, China's inflexible exchange rate has made it difficult for other emerging market economies to let their currencies appreciate. A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing.
Our objective is to use the opportunity presented by the G-20 and S&ED meetings with China to make material progress in the coming months.
Therefore, shall we assume that this report is delayed indefinitely? The China currency problem is nothing new, Geithner's esteemed predecessor dealt with it too and he managed to get the April 15th currency report out in time (Bloomberg):
U.S. Treasury Secretary Henry Paulson said China must accelerate its commitments on trade and a market-set exchange rate to head off protectionist legislation in Congress.
Paulson, who hosts the second session of a new bilateral economic dialogue next month, said yesterday that the talks need to yield ``tangible results.'' He said in a speech in New York that Chinese policy makers ``are not moving, in my judgment, quickly enough'' on the yuan.
(that's April 2007, starting to feel like you've been here before?)