John Snow, US Treasury secretary, gave another strong hint on Thursday that his department was likely to formally accuse China of being a â€œcurrency manipulatorâ€�, saying the new exchange rate regime Beijing introduced last summer has not led to greater currency flexibility.
During a visit to the Chicago Mercantile Exchange, Mr Snow said China had made little progress towards a more flexible exchange rate after it introduced a currency regime last summer, and that this would influence the Treasuryâ€™s next report on trade and exchange rates.
â€œWe havenâ€™t seen much movement towards grater flexibility and certainly that would weigh on our determination,â€� Mr Snow said.
Last July, China revalued the renminbi by 2 per cent and broke its decade-long exchange rate peg to the dollar, linking it to a basket of currencies. At the time, the Treasury welcomed the move and said it would allow a shift to greater currency flexibility over time. But since the announcement, the renminbi has risen less than 1 per cent against the dollar.