India is happy over China's announcement for its flexible policy as far as yuan is concerned and the policy will not hit the Indian economy adversely, Mukherjee said.
Finance minister Pranab Mukherjee said China's decision to allow its currency, yuan, to appreciate against the US dollar will not hurt the Indian economy.
India is happy over China's announcement for its flexible policy as far as yuan is concerned and the policy will not hit the Indian economy adversely, Mukherjee said here yesterday.
China ended its 23 month peg against the US dollar, which saw the Chinese currency rising more than 0.4% against the US dollar -- the biggest rise since 2005. It, however, fell 0.2% today after major Chinese banks bought dollar.
Yuan's appreciation against the US dollar will increase the purchasing power of the Chinese, although it would make
imports costlier for the West. On the other hand, increased
consumption in China would help US and European exports.
Mukherjee said China's decision will help the global economy and that he is hopeful that China will follow the policy keeping in view the interest of the world economy.
"I would hope that China would address the problems in proper perspective and what they have announced (if) they mean it and they would adopt flexibility, (it) will help the world economy," he said.
"In our bilateral relationship, it is not going to have that much impact. But I do believe, as a major player in economic arena, China should take note of the concern of the world economy and have the flexible (currency)," he added.
Though he said China's yuan policy will not adversely impact the Indian economy, exporters in India are looking forward for it as they expect to gain from a revalued yuan.
Appreciation of yuan will help Indian exporters compete better with their Chinese counterparts in the global market, especially in areas like textiles, leather and handicrafts.
Leaders of the industry and export organisations feel that the Chinese exporters will no more be able to quote artificially low rates to the buyers.
Industry body CII director general Chandrajit Banerjee said that they expect exporters of textiles, chemicals and light engineering goods to benefit from such a move.
Federation of Indian Export Organisations president A Sakthivel said quotations by Chinese suppliers do not reflect the real value of the dollar, hurting Indian interests.
Earlier in the day, the White House said that it would be monitoring the progress on the Chinese assurance that it would be making its currency more flexible. It also said that currency, indeed, would be one of the topics of discussions during upcoming G-20 Summit in Toronto.
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