Geithner gambling on Beijing strengthening yuan

United States Treasury Secretary Timothy Geithner delayed a scheduled April 15 report to Congress on exchange-rate policies, sidestepping a decision on whether to accuse China of manipulating the value of the yuan.

Geithner urged China to move towards a more flexible currency and said meetings over the next three months will be critical to bringing about policy changes that lead to a stronger and more balanced global economy.

The delay comes as Chinese President Hu Jintao is due to visit Washington for a nuclear summit next week.

The Treasury chief has faced demands from Congress to label China a currency manipulator for keeping the yuan little changed for almost two years. Geithner is betting China will take steps on its own in the next several months to strengthen its currency, analysts said.

Geithner said countries such as China with inflexible exchange rates can promote global growth by "combining policy efforts to strengthen domestic demand with greater exchange-rate flexibility".

"A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing."

- BLOOMBERG