China's central bank denies manipulating currency

BEIJING: China's central bank on Saturday denied it was manipulating the country's currency, reacting to a statement by US President Barack Obama's Treasury secretary-designate Timothy Geithner.

Su Ning, vice governor of the bank, called the allegation "untrue and misleading," China's official Xinhua news agency reported.

"We should avoid any excuse that might lead to the revitalisation of trade protectionism. Because it will do no good to the fight against the crisis, nor will it help the healthy and stable development of the global economy," it quoted Su as saying.

The comments were in response to Geithner's statement Thursday that "President Obama- backed by the conclusions of a broad range of economists- believes that China is manipulating its currency."

The Chinese commerce ministry also has denied the accusation and has promised to maintain a basically stable currency.

Under intense foreign pressure, China decided in mid-2005 to de-link its currency, the yuan, from the US dollar.

In the three years that followed, it rose about 20 per cent on the dollar, muting some of the criticism that Chinese exporters were getting an unfair advantage from an artificially low currency.

However, for most of 2008 the yuan changed very little against the US currency, with some analysts speculating that Beijing was concerned about pushing key export enterprises out of business.