The United States sees no practical reason why China should delay adopting a more flexible exchange rate, a senior US Treasury official said on Thursday.
The official, briefing reporters after the Treasury ruled in a semi-annual report that China was not manipulating its currency, expressed disappointment that Beijing was not letting it rise more quickly.
Restating Washington's long-standing position, he said a market-driven yuan was in the best interests of both China and the world economy.
And now that Beijing has let banks trade foreign exchange among themselves and introduced instruments that allow firms to hedge currency risks, there was nothing standing in its way.
"We don't see any technical reason why China couldn't move today to a more flexible exchange rate regime. We believe they can go," the official, who spoke on condition of anonymity, said.
The yuan has risen 1.3 percent since it was revalued by 2.1 percent against the dollar last July, when it was depegged from the US currency and allowed to float within managed bands.
Washington believes the currency is worth much more given that China had a balance-of-payments surplus last year equal to 9.3 percent of national income and sits atop the world's largest stockpile of foreign currency reserves, worth $875.1 billion. But the official was careful not to call explicitly for a stronger yuan, repeating instead that a more flexible currency was in China's interest.
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