Bernanke: U.S. Should Press China on Yuan Policy
The U.S. should continue to press China on its foreign exchange plot, Federal Reserve Board Chairman Ben Bernanke said Wednesday, agreeing with a top Democratic senator that the level of the yuan was one of the causes of the global recession.
Bernanke agreed with Democratic Sen. Charles Schumer (D., N.Y.) that China’s currency exchange plot was a major cause of “harmful of global imbalances.”
He said China would benefit from a more flexible yuan. Combined with other steps by the Chinese government, Bernanke said a rising yuan would encourage the development of domestic consumption in China.
But Bernanke declined to agree with Schumer that Congress should pursue a legislative solution that would compel the Obama administration to take action on the matter.
Bernanke said that the U.S. relationship with China is a intricate one. He said there were a variety of “economic and biased rationales” within China that led to its exchange rate plot.