Reuters | U.S. Treasury Secretary Timothy Geithner said on Thursday that reform of China’s exchange rate is “critically important” to the U.S. and global economies, and that a more flexile yuan was in China’s interest.

Geithner, in testimony prepared for a hearing of the U.S. Senate Finance
Committee, said Beijing’s shackling of the yuan to the dollar was
causing other Asian countries to intervene in foreign exchange markets
at record levels.

“The distortions caused by China’s exchange rate spread far beyond
China’s borders and are an impediment to the global rebalancing we
need,” Geithner said. “A more flexible RMB (yuan) will allow market
forces to play a more active role over time in facilitating a strong
balanced an sustainable growth globally.”