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http://www.bloomberg.com/apps/news?p...d=aR7yfqUwTb4M
By Mark Deen and Isabelle Mas
July 4 (Bloomberg) -- Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.
“The major part of Indian reserves is in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.
Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representatives to the summit.
As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.
“There should be a system to maintain the stability of the major reserve currencies,” Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing yesterday, highlighting China’s concerns about a global financial system dominated by the dollar.
[..]
Singh adviser Tendulkar said that big dollar holders face a “prisoner’s dilemma” in terms of managing their holdings. “That’s why I’m telling them to do this,” he said.
He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.
“The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,” he said. “Currency adjustment is one thing that suggests itself.”
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http://www.reuters.com/article/usDol...BrandChannel=0
On Friday, Suresh Tendulkar, chairman of the Indian prime minister's economic advisory council, said the dollar's weight in the basket of currencies that helps set the rate of India's partially convertible rupee currency INR=IN may be reduced.
Up until now, the U.S. dollar had been considered the main reserve currency in India. However, "India may change," he said.
"I think if you look at the global imbalances that were being talked about today between the surpluses (of) China and Japan and the deficits of the United States, I think that needs to be corrected. That I think is clear, Tendulkar said at the conference in Aix-en-Provence, France.
Asked whether the U.S. dollar should be weaker, he said: "I think it is necessary ... it should go down."
Asian Development Bank President Haruhiko Kuroda, however, said on Sunday it was important that global imbalances be unwound gradually.
By Mark Deen and Isabelle Mas
July 4 (Bloomberg) -- Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.
“The major part of Indian reserves is in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.
Singh is preparing to join leaders from the Group of Eight industrialized nations -- the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia -- at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representatives to the summit.
As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.
“There should be a system to maintain the stability of the major reserve currencies,” Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing yesterday, highlighting China’s concerns about a global financial system dominated by the dollar.
[..]
Singh adviser Tendulkar said that big dollar holders face a “prisoner’s dilemma” in terms of managing their holdings. “That’s why I’m telling them to do this,” he said.
He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.
“The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,” he said. “Currency adjustment is one thing that suggests itself.”
*****
http://www.reuters.com/article/usDol...BrandChannel=0
On Friday, Suresh Tendulkar, chairman of the Indian prime minister's economic advisory council, said the dollar's weight in the basket of currencies that helps set the rate of India's partially convertible rupee currency INR=IN may be reduced.
Up until now, the U.S. dollar had been considered the main reserve currency in India. However, "India may change," he said.
"I think if you look at the global imbalances that were being talked about today between the surpluses (of) China and Japan and the deficits of the United States, I think that needs to be corrected. That I think is clear, Tendulkar said at the conference in Aix-en-Provence, France.
Asked whether the U.S. dollar should be weaker, he said: "I think it is necessary ... it should go down."
Asian Development Bank President Haruhiko Kuroda, however, said on Sunday it was important that global imbalances be unwound gradually.