WASHINGTON - China has been making progress in key areas, including exchange rate flexibility, and it's essential that China continue to move in the direction of two-sided flexibility of its currency, a senior US Treasury official said on Wednesday.

Speaking to reporters ahead of the US treasury secretary's trip to Beijing for the eighth China-US Strategic and Economic Dialogue meetings, the official said that the hallmark for a market-oriented exchange rate regime pursued by China would be two-sided flexibility which allows the exchange rate of Chinese currency to appreciate and depreciate in response to market forces.

The official said that it's essential that China continue to move in the direction of two-sided flexibility of its currency.

When asked to comment on the recent depreciation of the Chinese currency renminbi, the official said that it's very important to evaluate exchange rate in real effective terms, namely against a basket of currencies of trading partners, instead of evaluating the exchange rate bilaterally.

The official also said that it's important for China to continue to clearly communicate its exchange rate policy intentions.

The value of Chinese?renminbi is basically within the fundamental equilibrium level, according to a recent research report released by the Washington-based think tank Peterson Institute for International Economics.

The report expected China's current account surplus will continue to fall, as a result of the upward trend in the real effective exchange rate of the renminbi.

It showed that the renminbi real effective exchange rate has increased about 18 percent from February 2012 to February 2016.