Ankara, Sept 6 (PTI) Factors like the Chinese devaluation of yuan and the US Fed's likely interest rate hike are "transient" and it will be only the real economy that will dictate the currency rate fluctuations and markets in India, says Indian Finance Minister Arun Jaitley.
He asserts that India is on a "sound footing" as manufacturing and services sectors have begun picking up and the government was focused on strengthening the real economy rather than being swayed by the market volatility.
"At this stage, one needs to distinguish between the real economy and the impact of currency devaluation on stock market and domestic currency. Eventually when this transient phase blows over, it is the real economy that is going to matter.
"That is what will dictate both the currency valuation and the stock market itself," Jaitley told PTI in an interview on the sidelines of the G20 meeting of Finance Ministers and Central Bank Governors that ended here on Saturday.
As the Chinese devaluation triggered a global market sell off, including in India in the past few weeks, the issue dominated the G20 meeting here and in the communique issued at the end of the meeting last night the 20 big economies, including India and China, committed themselves to refrain from competitive devaluation. They called for moving towards market-determined currency rates.
In his intervention at the G20 meeting on Saturday, Jaitley strongly pitched for global safety nets to address concerns over volatility in currency and stock markets, a demand that came against the backdrop of the economic shocks triggered by the Chinese devaluation of yuan.
He also sought well-designed and quickly-triggered safety nets under IMF by strengthening of liquidity arrangements by multilateral swap arrangements between member countries to tackle negative spillovers arising from domestic action.
"When compared to the rest of the world, we seem to be on a sound footing. The other positive indication that has now come from the US is that their second quarter growth figures are good and unemployment is going down," he said. .
Disclaimer: Please write your correct name and email address. Kindly do not post any personal, abusive, defamatory, infringing, obscene, indecent, discriminatory or unlawful or similar comments. canaranews.com will not be responsible for any defamatory message posted under this article.
Please note that under 66A of the IT Act, sending offensive or menacing messages through electronic communication service and sending false messages to cheat, mislead or deceive people or to cause annoyance to them is punishable. It is obligatory on CANARANEWS to provide the IP address and other details of senders of such comments, to the authority concerned upon request.
Hence, sending offensive comments using canaranews will be purely at your own risk, and in no way will canaranews.com be held responsible.