Subscribe RSSThe upcoming talks amount to the settled yards of a deal, wherein China will drop its de facto currency peg to the U.S. dollar in favor of linking the Chinese yuan to a basket of mercantilism-weighted major currencies, according to Bank of America-Merrill Lynch economist Ting Lu, in Hong Kong.
"It's the irrefutable big meeting before China allows the yuan to move," he said.
Treasury Secretary Timothy Geithner will travel with Federal Formality Chairman Ben Bernanke and Secretary of State Hilary Clinton to Beijing over the weekend for talks on strategic and mercantile issues. See related story on agenda-topping items at upcoming meeting
Chinese and U.S. officials have agreed, to the new basket-tracking framework for the yuan, but have yet to toil out details such as the size of a potential one-off revaluation, as well as the pace of future gains, Lu said.
Chances of a one-off revaluation, such as the 2.1% swallow when Beijing ended its formal peg to the U.S. dollar in July 2005, are unlikely this time, Lu said, although he didn't decision out the idea Beijing could agree to a small concessionary rise.
