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Geithner calls for currency rate formulas
WASHINGTON, -- U.S. Treasury Secretary Timothy Geithner said currency exchange rates and trade imbalances required international agreement to find a sustainable approach.
"Right now, there is no established sense of what's fair," Geithner said in a Wall Street Journal interview published Thursday.
Geithner is headed to Seoul for a Group of 20 Nations economic summit this weekend. His goals, he said, are to push nations to consider establishing a formula that would measure trade imbalances based on long-term outcomes.
In Palo Alto, Calif., earlier this week, Geithner said no country should be allowed to "devalue its way to prosperity and competitiveness." One of his goals in Seoul, he said, was to convince other economic leaders that it is not the intention of the United States to allow the dollar to depreciate to increase the affordability of U.S. goods in other countries.
China, however, is considered the pivot point on trade and currency rates. With huge trade surpluses and a currency many feel is grossly undervalued, Geithner said if China could count on other emerging countries to also raise the value of their currencies, "it would be easier for them to move."
China has already resisted the suggestion. Yao Jian, a spokesman for the Chinese Ministry of Commerce, said last week, "Other countries have no right to comment on what is a reasonable level for a country's trade surplus."
Tension, however, is building over currency rates. Top officials in Brazil, India and England have commented on the issue, Brazil's finance minister referring to "an international currency war."
WASHINGTON, -- U.S. Treasury Secretary Timothy Geithner said currency exchange rates and trade imbalances required international agreement to find a sustainable approach.
"Right now, there is no established sense of what's fair," Geithner said in a Wall Street Journal interview published Thursday.
Geithner is headed to Seoul for a Group of 20 Nations economic summit this weekend. His goals, he said, are to push nations to consider establishing a formula that would measure trade imbalances based on long-term outcomes.
In Palo Alto, Calif., earlier this week, Geithner said no country should be allowed to "devalue its way to prosperity and competitiveness." One of his goals in Seoul, he said, was to convince other economic leaders that it is not the intention of the United States to allow the dollar to depreciate to increase the affordability of U.S. goods in other countries.
China, however, is considered the pivot point on trade and currency rates. With huge trade surpluses and a currency many feel is grossly undervalued, Geithner said if China could count on other emerging countries to also raise the value of their currencies, "it would be easier for them to move."
China has already resisted the suggestion. Yao Jian, a spokesman for the Chinese Ministry of Commerce, said last week, "Other countries have no right to comment on what is a reasonable level for a country's trade surplus."
Tension, however, is building over currency rates. Top officials in Brazil, India and England have commented on the issue, Brazil's finance minister referring to "an international currency war."
