China has announced limited currency reform and pledged that it will allow its currency to appreciate against the US dollar. The move came ahead of the G-20 summit and just a day after US president Barak Obama's letter to member nations seeking better practices and flexible exchange rates.
Finance minister Pranab Mukherjee welcomed China's decision, saying it would help world trade. "India is happy over China's announcement for its flexible policy as far its currency yuan is concerned," he said
"The move should provide Indian exporters with a more level-playing field," said AEPC's chairman Premal Udani. "I hope this will benefit us in the long-term as an expensive yuan will make Indian goods priced competitively more attractive to large markets like the United States and the European Union."
China has been criticised for keeping the yuan artificially undervalued to give the country an unfair advantage in international trade. It is now believed that a stronger yuan will give the Chinese more purchasing power to buy foreign goods which is good for world trade.
China's decision comes ahead of the G-20 meet in Toronto where the move is expected to ease pressure on the country when it comes to removing restrictive trade practices and bring in structural reforms in the financial sector.
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