US sells Citi stake for profit

The last of the US Treasury’s shares of Citigroup Inc sold at $10.5 billion. This means taxpayers will reap a profit of $12 billion on their $45 billion cash investment in Citigroup. It also allows the bank to shake its reputation as a ward of the state.

James Angel, a finance professor at Georgetown University said: “It signals the company has been fully privatized and that their parole is over.”

Last year, the Treasury intended to sell off their 7.7 billion shares steadily over the course of six to 12 months, but had only sold 4.4 billion by October. The results of the November elections seemed to express discontent with government involvement in private business. As a result, the Treasury has increased its speed in selling off its 61% stake in General Motors.

The government still holds $3 billion in Citigroup stock.

China refuses to revalue currency

US Treasury Secretary Timothy Geithner says that global economic reforms are being impeded by China’s refusal to revalue their currency. It seems that China’s yuan may be undervalued by up to 40%.

The US has long had issue with the yuan being undervalued, claiming China uses it as a trade advantage. China has maintained the value of the yuan against the dollar since 2008 as demand slipped during the recession.

China says it will begin a gradual revaluing, but has not set a timetable.