Geithner says yuan to have broader int’l role: TV

By David Lawder

MUMBAI (BestGrowthStock) – U.S. Treasury Secretary Timothy Geithner said on Wednesday that China’s yuan currency would take a broader international role, which he described as a “healthy, necessary adjustment,” and said the United States was “very, very close” to sweeping financial reform.

“China’s undergoing a necessary, natural process of basic development and growth. They’re trying to strengthen the way markets work in their country,” Geithner said in an interview with Bloomberg TV in Mumbai.

“They’re trying to develop their financial system, they’re becoming more open to the world, and with that you’re going to see their currency take on a broader role internationally. That’s a healthy, necessary adjustment,” he said in the interview.

His comments came amid a volley of rhetoric over the yuan’s value between Beijing and Washington over recent days since Geithner decided to delay a report on whether China manipulates the yuan’s value for a trade advantage.

China’s foreign (Read more about foreign investment into China) ministry on Tuesday said it never has manipulated the yuan and that a rise wouldn’t reduce the U.S. trade deficit with China.

Asked about the timing of the report, which coincided with U.S. overtures for China’s support on nuclear security issues related to Iran, Geithner said the U.S. had to pursue many interests at once.

“That’s the way the world works. We face a variety of challenges throughout the world on the security side and the economic side, and we have to pursue our interests as a country.”

Geithner said U.S. pressure for yuan revaluation was part of a broad effort to lay a foundation for stronger growth that is more balanced and less dependent on U.S. spending.

“We’re trying to work with other countries around the world to make sure that the world can grow faster as those adjustments in the U.S. happen,” he said in the interview.

“And that means that countries large and small, countries around the world, have a huge interest in making sure that growth in their countries comes more from domestic sources. That’s what’s at stake, that’s what we’re trying to generate support for around the world,” he added.

Turning to negotiations in Congress over a financial reform bill, he said the United States was “very, very close to the most sweeping reforms to those put in place after the Great Depression.”

He reiterated support for a strong banking supervisory role for the Federal Reserve, and said he was confident new derivatives rules would be stronger than those proposed in a House of Representatives version of the legislation.

He also said in the interview that the rise in U.S. Treasury yields reflects returning investor confidence.

“What you’re seeing largely across the world now, is more confidence the world’s coming back, more confidence that the U.S. is emerging stronger, more comfort around the world among investors to take more risks again,” he said.

Stock Market Money

(Reporting by David Lawder; Editing by Tony Munroe)

Geithner says yuan to have broader int’l role: TV