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China and France want strong dollar

China and France are both in favour of a strong dollar, French Finance Minister Christine Lagarde said on Wednesday. "We share with the Chinese authorities the desire for a strong dollar," Lagarde told reporters at the end of a day of talks with officials including Central Bank of China Governor Zhou Xiaochuan and Finance Minister Xie Xuren.

world Updated: Oct 28, 2009 22:44 IST

China and France are both in favour of a strong dollar, French Finance Minister Christine Lagarde said on Wednesday.

"We share with the Chinese authorities the desire for a strong dollar," Lagarde told reporters at the end of a day of talks with officials including Central Bank of China Governor Zhou Xiaochuan and Finance Minister Xie Xuren.

Lagarde, who was questioned on the foreign exchange rate of the yuan -- undervalued in the eyes of many of China's Western trading partners -- refused to comment further, saying it was up to the Asian giant's central bank to comment.

A delegation from Europe is expected in China by the end of the year to persuade the world's third-largest economy to soften its foreign exchange policies.

The mission will be made up of Jean-Claude Juncker, the president of a forum of finance ministers for the eurozone, European Central Bank president Jean-Claude Trichet and European economic and monetary affairs commissioner Joaquin Almunia.

The euro is the main currency to suffer from a weak dollar because of its negative effect on European exports.

The yuan has been de facto pegged to the dollar since the summer of 2008. But Chinese officials have voiced concern about the weakness of the dollar as a large part of the country's monetary reserves are invested in US dollar assets.