India at G20: Will yuan revaluation overshadow talks?

By Reuters Staff
June 24, 2010

As India heads to Canada for the weekend G20 summit, the grouping’s agenda is expected largely to be dominated by China’s currency reforms and the global economic recovery.

An employee counts yuan banknotes at a bank in Huaibei, Anhui province June 22, 2010. REUTERS/Stringer

The United States, a major trading partner of China, has been cautious in its criticism of Beijing’s tight currency controls.

U.S. Treasury Secretary Timothy Geithner in April delayed a decision on whether to name China a currency manipulator in favour of bringing in pressure on Beijing at larger global forums such as the G20.

China’s central bank recently pledged to increase currency flexibility after pegging the yuan to the U.S. dollar for nearly two years.

Indian economists have said China’s undervalued exchange rate affects emerging market economies more than it does the United States and that New Delhi may be persuaded to support a broad-based effort aimed at currency rebalancing at the G20.

Given India’s robust growth, will it be able to use the G20 platform to push pending issues such as IMF reforms? Will the yuan debate dominate the talks?

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