Geithner confident China will usher in flexible currency

U.S. Treasury Secretary Timothy Geithner said Thursday he was confident China would allow its yuan currency to become more flexible and reflect market expectations.

Pressures are building up in the Western capitals that now the global recession is receding and China's exports has begun to climb up, that Beijing should let its currency rise in value, in the hope more Western manufactured goods will be imported to China.

Answering questions from an array of lawmakers concerned over the value of the yuan currency, Geithner noted China had made a commitment to allowing the currency to fluctuate.

"China, as I've said many times, has committed to move," he told a congressional hearing. "They understand they need to do it. I think they want to do it. And I'm actually quite confident they will do it."

Geithner said that China and several other Asian nations had intervened in the foreign exchange market, apparently to contain the rise of their currencies.

"The scale of intervention declined dramatically in the peak of the crisis. It started to increase again in China and countries around the world," he said, citing the latest financial crisis which peaked around the end of 2008.

Geithner's remarks came after U.S. President Barack Obama, on his maiden China visit, tactfully voiced US worries that China's currency was kept at a level that aids its goods exports.

"I was pleased to note the Chinese commitment, made in past statements, to move toward a more market-oriented exchange rate over time," Obama said in Beijing.

International Monetary Fund chief Dominique Strauss-Kahn -- whose visit to China this week coincided with that of Obama -- said Beijing should let the yuan rise "sooner rather than later," saying it would benefit both China and the global economy, said a report from AFP.