Flexible yuan would help world economy: Pranab

I / Washington June 22, 2010, 11:17 IST

Finance Minister Pranab Mukherjee has said that China's decision to make its currency, yuan, more flexible will help the world economy.

"I would hope that China would address the problems in its proper perspective and what they have announced they mean it and they would adopt flexibility, which will help the world economy," Mukherjee said in response to a question at an interactive event with Indian and American CEOs in Washington yesterday.

"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 said.

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.

"As the (US) President and (Treasury) Secretary (Timothy) Geithner said this weekend, we are obviously encouraged, but we will be monitoring the progress," the White House Deputy Press Secretary, Bill Burton, told the reporters.

In separate statements over the weekend, the US President, Barack Obama, and Geithner had welcomed the Chinese announcement that it will move towards a more flexible exchange rate. But the Chinese statement was not specific about its plans.

"Implementation here is going to be key, and so we are just going to be keeping an eye on that," Burton said.

"In terms of the broader discussion that they will be having about job growth, about financial regulatory reforms that need to be put in place and have been put in place and how we get on a path of a durable global economic recovery, currency will certainly be a part of that discussion," Burton said in response to a question.