Nuke deal good for both nations: Paulson
US Treasury Secretary Henry Paulson said that he is optimistic about India going ahead with the Indo-US civil nuclear deal, a move that investors would find positive.
By TNN |
NEW DELHI: US Treasury Secretary Henry Paulson said on Tuesday that he is optimistic about India going ahead with the Indo-US civil nuclear deal, a move that investors would find positive.
“I am an optimist. I think good ideas automatically get done. We believe that the deal is good for both the nations. India is a vibrant democracy. The democratic process has to work. Let India make its own conclusion,” Mr Paulson said in response to a query on the deal which has hit a roadblock following stiff opposition from the Left parties.
Addressing a summit in the Capital on Tuesday, Mr Paulson said it is important to get the civil nuclear deal implemented as soon as possible because it would be beneficial for India’s energy security and infrastructure in addition to helping the country meet the need for clean energy sources.
Asked about dollar losing strength against major currencies in the world, the treasury secretary said the US is very much committed to a strong dollar. He also said India’s flexible rupee exchange rate was helping to control domestic inflation, but warned that capital controls could have counter-productive effects. He tempered his comments on India’s new curbs on participatory notes aimed at stemming the flow of anonymous foreign money flowing into its stock market. However, he said it was important that such rules be transparent and flexible.
Currencies should be set in open markets based on economic fundamentals, he said, adding that China has some work to do to get to a market-determined exchange rate.
Mr Paulson exuded confidence that the US financial markets were on their way to recovery from the subprime crisis. While many US financial markets were functioning as normal in the aftermath of the subprime crisis that roiled global markets in July and August, several, including high-yield debt, mortgage markets, highly structured debt securities and asset-back commercial paper, were not yet back to normal. “All of those markets are doing better every day, but it is going to take a while to work our way through,” he said.
He said that the subprime mortgage market, where the crisis originated, would take longer to recover because of a large number of interest rate resets on adjustable-rate mortgages over the next 18 months. And while it was definitely the case that innovation in US capital markets had gotten ahead of regulatory controls, contributing to the crisis, he said that such innovation remained desirable.
“I don’t think we would want it the other way around. Had it been the other way, we’d be sacrificing growth and efficiency in the markets,” Mr Paulson said.
“I am an optimist. I think good ideas automatically get done. We believe that the deal is good for both the nations. India is a vibrant democracy. The democratic process has to work. Let India make its own conclusion,” Mr Paulson said in response to a query on the deal which has hit a roadblock following stiff opposition from the Left parties.
Addressing a summit in the Capital on Tuesday, Mr Paulson said it is important to get the civil nuclear deal implemented as soon as possible because it would be beneficial for India’s energy security and infrastructure in addition to helping the country meet the need for clean energy sources.
Asked about dollar losing strength against major currencies in the world, the treasury secretary said the US is very much committed to a strong dollar. He also said India’s flexible rupee exchange rate was helping to control domestic inflation, but warned that capital controls could have counter-productive effects. He tempered his comments on India’s new curbs on participatory notes aimed at stemming the flow of anonymous foreign money flowing into its stock market. However, he said it was important that such rules be transparent and flexible.
Currencies should be set in open markets based on economic fundamentals, he said, adding that China has some work to do to get to a market-determined exchange rate.
Mr Paulson exuded confidence that the US financial markets were on their way to recovery from the subprime crisis. While many US financial markets were functioning as normal in the aftermath of the subprime crisis that roiled global markets in July and August, several, including high-yield debt, mortgage markets, highly structured debt securities and asset-back commercial paper, were not yet back to normal. “All of those markets are doing better every day, but it is going to take a while to work our way through,” he said.
ADVERTISEMENT
He said that the subprime mortgage market, where the crisis originated, would take longer to recover because of a large number of interest rate resets on adjustable-rate mortgages over the next 18 months. And while it was definitely the case that innovation in US capital markets had gotten ahead of regulatory controls, contributing to the crisis, he said that such innovation remained desirable.
“I don’t think we would want it the other way around. Had it been the other way, we’d be sacrificing growth and efficiency in the markets,” Mr Paulson said.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
