China Backs Off Currency Intervention

Early on in Treasury Secretary Timothy Geithner’s tenure, he piqued the attention of online forex traders when he suggested that China was manipulating the yuan. However, it now appears that Geithner has revised his previous attitude and no longer claims evidence of yuan manipulation. Those who follow online forex trading have wondered if this is merely political doublespeak or if, in fact, China has adopted more of a laissez-faire attitude towards its currency.

While there are quite possibly traces of the former at work, critical opinion points to the latter as the rate at which China increases its forex holdings declines and China, in trying to position itself as the new global economic superpower, allows the yuan to free float in the market. Moreover, China’s economic growth has slowed this year to 6.1%, which is the slowest growth rate on record in 10 years.