Mukherjee wants each country to adjust its currency as per market forces

Saturday, February 19, 2011

PARIS - Indian Finance Minister Pranab Mukherjee has said that in the current global scenario, each country should adjust its currency as per the market forces.

He said this on the sidelines of the multilateral meet of G-20 Finance Ministers and heads of central banks at Paris in France on Friday.

Addressing a poser on the China’s artificial currency depreciation, Mukherjee said that though currency depreciation is not a part of discussion at the G-20, the economies should not resort to value judgement.

“Every country is to adjust its currency which is market relevant and which should be driven by the market force as far as possible. At the same time every country has its own problems and they will have to address issues and you cannot sit on a value judgement from outside. Therefore, best will be to leave it to the sovereign governments to decide the course of action they will take,” said Mukherjee.

Members of European Union have viewed that China is set to become the world’s second-largest economy after the United States this year by keeping the Yuan artificially low to boost exports, undermining jobs and competitiveness in Western economies.

India and Brazil have joined the United States in voicing concern about the slow speed of the Yuan’s appreciation, saying it was hurting their exports.

China has come under pressure from the United States to increase the value of its currency more rapidly in order to spur domestic demand and help narrow its trade gap.

Indian Commerce Minister Anand Sharma had said in early December 2010 that India is worried about its trade deficit with China and hopes to create a mechanism to give Indian companies greater market access to the Chinese market.

India’s overall trade deficit was 35.4 billion dollars in the September quarter as against a downwardly revised 31.6 billion dollars in the June quarter.

The trade deficit hit a 23-month high of 13.06 billion dollars in August but shrank to an eight-month low of 8.9 billion dollars in November as exports began to outpace import growth from October. (ANI)

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