Geithner: Strong Dollar ‘Very Important’ for U.S.

(Agence France-Presse)

The dollar has plunged about 15% against a basket of six other major currencies from a peak earlier this year

U.S. Treasury Secretary Timothy Geithner said Wednesday a strong dollar was “very important” to the United States, seeking to reassure Asian nations concerned about the greenback’s recent slump. “I believe deeply that it’s very important for the U.S. and the economic health of the U.S. that we maintain a strong dollar,” Geithner told reporters in Tokyo.

Given the dollar’s key role in the world financial system, “we bear special responsibility for trying to make sure that we are implementing policy in the U.S. that will sustain confidence” among global investors, he said.

The dollar has plunged about 15% against a basket of six other major currencies from a peak earlier this year, sparking concern among Asian countries that have big holdings of dollars in their foreign exchange reserves. The dollar’s weakness is also bad news for many Asian exporters, which are struggling to maintain their competitiveness, particularly against Chinese rivals benefiting from the relative stability of the yuan. Read more here.