France, India to work on reforming global monetary system

With capital inflows becoming a hot issue in emerging economies like India, France today said it will work in cooperation with New Delhi on reforming the international monetary system.

"We have many interests in common. We decided that whatever we do to reform the international monetary system with a view to avoid vulnerability, with a view to avoiding lots of inflows and outflows of capital that are factors of destabilisation, we will do it together," French Economy Minister Christine Lagarde said.

She was speaking to reporters after a meeting with Finance Minister Pranab Mukherjee.

"We were able to discuss our G20 agenda. We will work in close cooperation," Lagarde said.

Nicholas Sarkozy, the French President who is currently leading a high-powered delegation to India, will be taking over as head of the G20 in 2011. The group includes major industrialised and emerging economies.

France had been at the forefront of reforming the international monetary system and the G20.

Capital inflows have become a crucial issues in emerging market economies like India, which has attracted around$39 billion of foreign money in its capital markets alone so far this year.

With growth in developed nations still fragile, money from those countries are finding ways in emerging market economies where rates of return are lucrative.