WASHINGTON — US Secretary of Treasury Jacob Lew said on Sept 1 that China’s current RMB exchange rate fluctuations reflect market forces, adding that the G20 forums are an important mechanism to foster global commitments.

Market forces are now putting downward pressure on the RMB, and the US needs to accept that, Lew said in the question and answer session at the G20 Hangzhou summit preview event held by the Brookings Institution.

China has made it clear that it will move in an orderly way toward a more market-determined exchange rate, and is prepared to do that, said Lew.

But he added that China needs to allow the RMB to appreciate when the market forces are driving the RMB up.

The Chinese have acknowledged for themselves that they have a problem with excessive capacity, Lew said in the Q&A session.

He said the US recognized it’s hard for China to implement overcapacity reduction policies, as it involves not only economic, but political and social systems.