Visiting China, the head of the International Monetary Fund, Dominique Strauss-Kahn, continues to press Beijing to let its currency strengthen.
He said that should be part of a package of policies to help rebalance China’s economy and promote domestic demand. Strauss-Kahn told reporters: “We do believe firmly in IMF that the renminbi is undervalued and that it is not only in the interest of the global economy but also in the interest of China to have revaluation of the currency.” China’s cheap currency gives it an edge in trade terms, which the US and Europe are unhappy about. President Obama also urged his Chinese counterpart to let the currency rise in value at a summit where strains over trade were evident. Standing next to Obama after their meeting, President Hu Jintao did not mention currencies. Instead Hu emphasized the need to avoid trade protectionism. That was a thinly veiled reference to China’s irritation over new US tariffs on Chinese-made tyres, steel pipes and other products. On the currency question, analysts have said that Beijing is reluctant to be seen to be making policy concessions under foreign pressure.