| 23°C Dublin

World needs a strong dollar, says Geithner

Close

Korn Chatikavanij, Thailand's
finance minister, left, looks on as
Timothy Geithner, US Treasury
Secretary, speaks at the 16th Asia-
Pacific Economic Co-operation
(APEC) finance ministers news
conference in Singapore.

Korn Chatikavanij, Thailand's finance minister, left, looks on as Timothy Geithner, US Treasury Secretary, speaks at the 16th Asia- Pacific Economic Co-operation (APEC) finance ministers news conference in Singapore.

Korn Chatikavanij, Thailand's finance minister, left, looks on as Timothy Geithner, US Treasury Secretary, speaks at the 16th Asia- Pacific Economic Co-operation (APEC) finance ministers news conference in Singapore.

IT is very important that the US maintains a "strong" dollar because of its status as the world's major reserve currency, US Treasury Secretary Tim Geithner said.

Asked at a conference in Asia if the fall in the dollar would help spur American exports, Mr Geithner said the US "bears a special responsibility" because of its economy's global role.

Asia is "leading the world" back to recovery, he said. His comments came as new figures showed fewer Americans than anticipated filed claims for jobless benefits last week.

But Federal Reserve officials warned that the world's largest economy would be slow to recover as rising unemployment curbed consumer spending.

San Francisco Fed Bank president Janet Yellen raised the prospect of a "jobless recovery" in a speech in Phoenix, while Dennis Lockhart, who heads the Atlanta Fed, predicted a "relatively subdued pace of growth" this quarter and beyond. The comments are among the first on the economic outlook since the Fed signalled last week that any move on interest rates would depend on increases in employment and inflation.

Inflation

Dallas Fed president Richard Fisher said growth and inflation may persist below ideal levels into 2011, making the central bank's current interest-rate stance "appropriate". Speaking in London, Boston Fed president Eric Rosengren echoed that comment.

"The appropriate time is to raise rates when that's necessary to get us back on a path to inflation and unemployment in a range that we are more comfortable with," he said. "And I'd say we're not there."

Mr Lockhart said the conditions he listed before interest rates might change weren't "exhaustive".

"Certainly, there are scenarios in which the unemployment rate might still be at a frustratingly high level and might not have moved much, in which the overall conditions in the economy would justify beginning to tighten," he said. "I wouldn't focus on unemployment or employment alone."

Mortgage applications to purchase homes in the US plunged last week to the lowest level in almost nine years as Americans waited for the outcome of deliberations to extend a government tax credit. (Bloomberg)

Business Newsletter

Read the leading stories from the world of business.

This field is required


Most Watched





Privacy