US Treasury Secretary John Snow says China has accepted the notion of currency flexibility and is "taking a lot of steps" in that direction.

Speaking to journalists in Dublin, Snow reiterated Washington's view that China should allow a more flexible exchange rate for the yuan, which has been de facto pegged to the dollar for a decade.

He notes that "the global economy would function better when there is more flexibility for the yuan."

Snow says Beijing has agreed to this principle and is moving in the right direction, adding that China is "preparing the financial infrastructure so that flexibility would work."

Speculation is mounting among currency traders especially after China's central bank last month raised benchmark interest rates for the first time in nearly a decade.

Snow arrived in Dublin on Sunday for a week-long tour of Europe aiming to highlight the need for stronger economic growth in Europe and elsewhere as Washington tries to blunt criticism over massive US deficits that have pushed the dollar to new lows.

(Source: AFP)

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