(Fixes spelling in first paragraph)
By Mike Dolan
CAMBRIDGE, England, April 9 (Reuters) - Billionaire financier George Soros said on Friday the Greek debt crisis was solvable if Germany agreed that any emergency lending would be made with concessionary interest rates.
He also said that hedge funds should stay away from Greek debt because the risk was currently greater than the reward.
Current market rates for Greece are exaggerated by confusion about how a bailout might work, he told Reuters in an interview.
"If Germany was willing to find a way...of lending at concessional rates, market rates would come down, he said, on the sidelines of an economic conference.
Soros, chairman of Soros Fund Management, said confusion over whether Germany was willing to provide funding for Greece at rates below current market levels was effectively boosting those market rates.
"I hope that Germany will realise that talking about lending at market rates is the wrong remedy. It would push Greece into the abyss," he said.
Greece is under pressure to seek international help to manage its worsening debt crisis. There was a frantic sell-off of Greek bonds and shares this week due to growing doubts over a joint euro zone/IMF rescue plan.
"Greece has to reduce its budget deficit but it also needs some help from the European Union to rollover its debts. The IMF does that regularly -- providing assistance at concessional rates, provided the country does its side -- so its conditional," Soros said.
But he said the German constitutional court interprets the euro zone's no bailout clause very strictly and, under public pressure and ahead if key elections, Germany only wants to lend at market rates.
"This is a complete misunderstanding of what market rates are really showing," he said. "There is confusion (about Germany's stance), and market rates reflect that uncertainty."
"It is solvable -- I hope we get there."
But Soros did not see much room for hedge funds to make much of the current situation, saying the risk was too great, particularly in what he termed the "toxic" market for credit default swaps.
U.S-CHINA
Turning to the separate issue of whether China was planning to revalue its currency, Soros said: "I am pretty convinced some kind of understanding (between the United States and China) has been reached."
He added, however, that he was not privy to specific information.
"President Hu would not be coming to the nuclear disarmament conference in Washington if immediately thereafter there would be a confrontation on the (yuan)," he said.
Speculation has grown about an imminent revaluation of the Chinese yuan. Investors are focusing on the scale of the move with forecasts for a widening of the dollar/yuan band ranging from 2 to 5 percent by the year-end.
(Reporting by Mike Dolan; written by Jeremy Gaunt; editing by Ron Askew)