Indian minister warns against reserves, deficits

October 8, 2010 04:09

WASHINGTON — India's finance minister is warning that massive reserves in some countries and deep fiscal deficits in others are bad for the world economy.

Pranab Mukherjee also cautioned Thursday against growing trade imbalances.He did not mention a specific country in comments ahead of this week's global financial meetings. But China, Germany and Japan are leading trade "surplus" countries and often are prodded to boost domestic spending.

China has huge foreign exchange reserves and regularly faces accusations that currency manipulation gives Beijing an unfair trade advantage.

Mukherjee says that disagreements over currency values must be resolved through talks, not confrontation.

He says nations must also make sure financial regulations protect the vulnerable without crushing economic growth.

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