Why Geithner Punted On China: He's Hoping A Meeting In November Will Spare Him The Decision

Geithner

So the Treasury is delaying its report on whether or not China is a currency manipulator.

Apparently Geithner is waiting until after the G20 meeting in November.

Why then?

This from IBTimes probably answers that question:

The G20 meeting in South Korea next month will likely result in an agreement on currency valuations, said Douglas C. Borthwick, managing director of Faros Trading in Stamford, Conn.

According to Borthwick, there is an understanding throughout Asia that there will be an agreement similar to 1985’s ‘Plaza’ Accord at the G20 meeting.

“Asian countries are very wary of the significant pain that Japan faced in the [years following the ‘Plaza’ Accord] — the Japanese Yen appreciated by 50 per cent [afterwards],” he said.

There’s been a lot of chatter — none actually backed up by anything — that a new Plaza Accord could be coming to create a truce in the currency war.

If there’s a glimmer of hope that the G20 could be the venue for that, then this would definitely save Geithner from having to make an awkward decision.

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