At 5 p.m. today, Treasury released its Report to Congress on International Economic and Exchange Rate Policies. Regarding China, it said: "On June 19, 2010, China announced that it was returning to an exchange rate regime that would be more flexible and more market based, with the renminbi allowed to trade within a band of plus/minus 0.5 percent against the dollar on a daily basis. On June 21, the first trading day following China’s announcement, the renminbi appreciated 0.43 percent, the largest single day appreciation against the dollar since China’s initial 2.1 percent revaluation on July 21, 2005. Between the June 19 announcement and July 2, the renminbi appreciated a total of 0.81 percent versus the dollar, while average intraday volatility has been much higher than that seen during the 2007-08 period of steady renminbi appreciation against the dollar. China’s policy shift is a significant development and a welcome step forward in fostering stronger, more sustainable, and more balanced global growth.
Why do the spin-meisters keep doing this?
Just when Treasury Secretary Tim Geithner is enjoying a rare patch of fairly positive press coverage, the Treasury resorts to one of the oldest and hoariest ruses in the PR handbook for announcing something in a way to attract a bare minimum of public attention.
The WSJ just posted Geithner's announcement that Treasury is delaying its semi-annual report on currency manipulation, which must either accuse or acquit China of manipulating its currency, the renmimbi, to boost exports.
To his credit, Geithner is openly admitting that he's delaying the report because he doesn't want to making the Chinese mad ahead of "high-level meetings" over the next three month. That's more than the Bush Treasury did; on at least one occasion, it missed the Congressional deadline for months without even bothering to say anything.