Bernanke was in Beijing as part of a high-level US delegation led by Treasury Secretary Henry Paulson that was trying to persuade China to let its currency float more freely to help reduce economic global economic imbalances.

"Monetary policy may be constrained by the lack of a reliable monetary transmission mechanism and by the relative inflexibility of the exchange rate, which inhibit the central bank's ability to keep inflation low and to stabilise the economy," Bernanke said in remarks prepared for delivery to the Chinese Academy of Social Sciences in Beijing.

US officials want a stronger yuan to help cut America's record trade deficit with China.

This reached US$24,4 billion in October, 40 per cent of the total US trade deficit.

But Bernanke stressed that a freer-floating yuan, also known as the renminbi (RMB), was very much in China's self-interest.

Nampa-Reuters

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