New Delhi not keen to join devalue yuan chorus
25 Oct 2010
Though New Delhi has admitted to being affected by an undervalued Chinese reminibi it has at the same time, made it clear that it is ''not convinced by the claim'' the global economic crisis is the result of that strategy alone.
According to unnamed sources quoted by The Hindu newspaper, an undervalued Chinese currency was one factor in the current world economic crisis. They add that there are a series of other issues besides the currency rate.
The sources said they did not want the world to take such drastic steps that would destroy economic recovery in the developed world.
According to the sources, the currency issues needed to be dealt within a larger architecture and the Chinese reforms was not a one-shot answer to the problem.
The advantages of an undervalued yuan to India included cheaper imports and prices kept down while on the other hand Indian manufacturers felt it affected their competitiveness domestically and overseas.
The observations come weeks ahead of the G-20 summit in Seoul even as reports in western media suggest an alliance to force China to fix its currency at ''realistic'' levels. According to the reports the basic reason for the economic crises was the ''unrealistic low value'' of the yuan.
