Tags: treasury | lew | china | currency

Treasury's Lew: China Will Be Held 'Accountable' on Currency

Image: Treasury's Lew: China Will Be Held 'Accountable' on Currency
(Dollar Photo Club)

Thursday, 03 Sep 2015 08:33 AM

The Obama administration on Wednesday urged China to be clear about its intentions when it changes currency policies.

"They need to understand that they signal their intentions by the actions they take and the way they announce them," U.S. Treasury Secretary Jack Lew told network CNBC in an interview ahead of a Group of 20 meeting that Chinese officials will attend.

"They have to be very clear that they are continuing to move in a positive direction and we're going to hold them accountable," Lew said.

The People's Bank of China (PBOC) has repeatedly intervened to stabilize the yuan since an Aug. 11 devaluation - billed as free-market reform - sent shockwaves through global markets and depressed emerging currencies.

Worries about a sharp slowdown in China's economy have jolted global financial markets and heightened concern among Asian policymakers on the outlook for the region's economies.

"They have to understand, and I make this point to them quite clearly, that there's an economic and a political reality to things like exchange rates," he said.

"I think that we have been very clear for a very long time with China, how they manage their exchange rate is a matter of great concern to us and that they need to be willing to let market forces drive the value up, not just drive it down," he said in the interview Wednesday.

"I think it is something we will discuss at the G-20, is any temptation to slip into what might look like competitive devaluation. It's both unfair and it ultimately leads to a worse global economy."

Lew said more economic reform is the right answer for China. "There needs to be a set of reforms put in place where the economy becomes much more market oriented, where consumer demand grows and there's a shift from a heavy, heavy emphasis on investor spending to more consumer-driven spending," he said.

"What they're experiencing now is the challenge of managing that transition in an orderly way," he continued. "The really important question for the medium and the long term is, 'Do they have the ability to stick to the reform plan that they've mapped out?" he asked.

"We expect them to behave in a way that meets a level of transparency where it's credible that they're moving to keep commitments that they've made," he said.

© 2017 Thomson/Reuters. All rights reserved.

 
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The Obama administration on Wednesday urged China to be clear about its intentions when it changes currency policies.
treasury, lew, china, currency
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2015-33-03
Thursday, 03 Sep 2015 08:33 AM
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