More flexible fx will help fix imbalances: Geithner

US Treasury Secretary Timothy Geithner said on Saturday that Group of 20 nations were moving gradually to find ways to reduce global economic imbalances and said flexible exchange rates would help the process.

In prepared remarks at the end of a two-day meeting of G20 finance leaders, Geithner repeated that China's yuan was undervalued and said all major nations would need to contribute to reduce imbalances. "There is broad consensus that the major economies, not just Europe, Japan and the United States, but also the large emerging economies need to allow their exchange rates to adjust in response to market forces," Geithner said. He said the rise in some emerging market currencies was not helped by the actions of other emerging nations. "The upward pressure on those exchange rates is being accentuated by the fact that other major emerging markets are holding their exchange rates at undervalued levels and tightly limiting capital inflows, which serves to exacerbate price pressures within their own economies and shift the burden of adjustment to others," Geithner said. He said European leaders had told their G20 peers that they would ensure that struggling euro zone nations and their banks would have access to financing.