"I am strongly committed to a stronger dollar, which is the intent in the US," visiting US Treasury Secretary Henry Paulson said in a question and answer session at the Fortune Global Forum meeting in New Delhi.
"The value of currency should be market determined... rupee value should be set on the basis of economic fundamentals," he said, while noting that in case of India the economic growth is good and inflation is under control.
The Indian currency has risen nearly 12 per cent against the US dollar in 2007 and about 14 per cent in the past one year. The country's central bank has not intervened much as this makes imports cheaper, helping it control inflation in the world's second-fastest growing major economy.
He further said that a number of currencies are now market determined and China too will have to work towards that. "China has some work to do."
Stating that India has made good progress in capital market and has a very vibrant equity market, he said: "Mumbai can become a global financial centre with development of infrastructure, improvement in investment climate and regulatory changes."
He further said that though many MNCs are having back office operations in Bangalore, they continue to have front offices in countries like Singapore.
However, Paulson added: "India is on the right path" and the US would want to see more good things happening in the country as its growth would be good for the US as well as the world.
Replying to questions on the Doha Round, Paulson said: "India is concerned about its farmers' subsistence, we are also concerned about them. Everyone understands problems in agriculture."
However, Paulson stressed that opening up of non-agriculture sector will help the developing countries to increase market access and benefit from ensuing competition.
In India, he added, one can witness the results of opening up of sectors such as airlines, telecommunications and software, which are doing very well.
He further said that advanced developing countries like India and Brazil would play a key role in success of the Doha Round.
Attributing the US sub-prime crisis to bad lending practices of the banks, Paulson said that "(sub-prime) is not a big part of the mortgage portfolio and we have not sacrificed growth while dealing with the problem."
On issues concerning the environment, Paulson said "we need to provide right market signals" to encourage development and adoption of clean technologies.
The problems concerning carbon emissions and climate change, he said, "can only be solved by adopting a long-term approach" by different countries as question of whether the emission is from the US or India does not matters much.
Today, Paulson said, clean technologies are available with the US and "we can work together" to deal with the environmental problems.
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