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US Treasury releases delayed China currency report

US dollar bills are counted as yuan notes are seen at a bank in Huaibei, China, file pic
Image caption Many in the US have accused China of keeping the yuan low to boost exports

The US Treasury has released its much-delayed semi-annual currency report.

The report, originally due to be published in April, says China's currency, the yuan, is undervalued.

It did not say - as some believe - that China manipulates its exchange rate to give it a competitive advantage.

US exporters in particular think that China uses its vast stocks of foreign exchange to depress the worth of the yuan - something that would keep the price of its goods artificially low.

China has an official policy of only allowing its currency to move within a certain band, rather than allowing it to float freely, as do the pound, the euro and the dollar.

US lawmakers have accused China for years of artificially weakening the value of the yuan and demanded that President Barack Obama label the country a currency manipulator.

China is under constant pressure to allow its currency to more fully reflect a free-market valuation.

Close eye

Three weeks ago, the Chinese central bank said it would loosen its currency controls amid mounting international pressure.

The Chinese currency has been held at about 6.83 to the dollar since July 2008.

The US Treasury Secretary, Timothy Geithner, said in Thursday's report to Congress that he would be keeping a close eye on the yuan, also known as the renminbi.

"We will closely and regularly monitor the appreciation of the renminbi and will continue to work towards expanded US export opportunities in China that support employment in the United States," he said.

Mr Geithner's report was scheduled to have been sent to Congress in April but he had postponed it in a bid to give China more time to make the yuan flexible.

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