Currency decisions 'sovereign' - Snow
Updated: 2005-12-03 09:26
LONDON - China has given no timeline on any plans for a further revaluation of its yuan currency, but the U.S. will continue to urge greater flexibility in Beijing's exchange rate, U.S. Treasury Secretary John Snow said on Friday.
"No they haven't," Snow told Reuters in an interview in London when asked if the Chinese had given fresh undertakings on a schedule for further currency liberalization in the wake of the yuan's depegging from the dollar in July.
Snow said it was China's sovereign decision if any further changes were to be made to its currency regime.
"Decisions on a country's currency are sovereign decisions and they are decisions that China has to make. Our role in this is simply to convey to China our view that it is very much in China's interest to move to greater flexibility," he said.
"We want to see them continue down that path. That's not just important for China it's important for the global economy as well," he added.
China's currency would be one of the topics on the agenda at this weekend's meeting of G7 finance ministers and central bankers who will also be joined by senior officials from China, India, Brazil, Russia and South Africa.
Snow was also asked if Japan's yen -- which lost around 17 percent against the dollar so far this year -- would also be a feature of discussions.
Snow was asked: "Switching the focus to Japan and the Japanese yen, the yen has weakened considerably. Will you be discussing this with your counterparts or taking it to the G7?"
Snow replied: "The Japanese finance minister and central bank governor will be there. We continue to review the global economy with them. Japan is also a critical part of the global economy with the second largest GDP. All of these issues are continuously under review in our joint discussions and in our general discussions."
The dollar, which had earlier in the day risen above 121.15 yen for the first time since March 2003, fell back sharply to about 120.55 yen after Snow's comments.
The U.S. Treasury issued a statement subsequently to say that Snow had no comment to make on the yen's relative value.
Central bankers and finance ministers from the G7 have so far been sanguine on the dollar's strength in 2005, but the yen's fall to a 20-year low on a trade weighted basis is raising eyebrows in financial markets.
Yen weakness could hamper U.S. efforts to encourage China to allow its currency to trade more flexibly, which Washington has pressed for since Beijing broke its peg to the dollar in July.
The U.S. is expected to keep up pressure on Beijing to let its currency rise against the dollar to ease pressure on U.S. exporters, but few analysts see major changes to the G7 stance on currencies in the communique issued after the meeting.
Energy prices will also be on the agenda at this weekend's G7 meeting.
Snow said he was hopeful that a recent decline in crude oil costs was the start of a moderating trend.
"We would expect to see energy prices moderate some," he said.
He was also hopeful that the leaders from the world's richest nations would reach agreement to push for a successful conclusion to global trade talks in Hong Kong later this month.
"I certainly hope that our communique that comes at the end of the G7 ministers' meeting will underscore the critical importance of the Doha (trade talks) round and the need to get more energy and momentum and priority into it," Snow said.
But he said there were no guarantees that the Hong Kong trade talks would be successful.
"We are hopeful. There are no guarantees here."