Treasury Secretary Timothy Geithner says the United States will "never" manipulate the dollar and has hit back at a surprise attack from former Federal Reserve chairman Alan Greenspan.
Greenspan's contention this week that the United States is deliberately weakening the dollar gave succour to critics led by China and Germany, who are arguing at a G20 summit in Seoul that Washington is endangering world growth.
But in an interview broadcast Thursday with the business channel CNBC, Geithner said: "The US will never do that. We will never seek to weaken our currency as a tool to gain competitive advantage or to grow the economy."
The barrage of anti-US criticism has seriously undermined a push by Geithner and US President Barack Obama for the G20 to adopt strong guidelines on redressing trade distortions between deficit and surplus countries.
|US Treasury Secretary Timothy Geithner at the APEC Japan 2010 Finance Ministers' Meeting in Kyoto on November 6, 2010.|
The attacks have intensified after the Federal Reserve instituted a 600-billion-dollar attempt to reflate the US economy, in a radical monetary step that foreign critics say will trigger tit-for-tat currency devaluations.
In a commentary for Thursday's Financial Times, as the G20 leaders gathered for their two-day summit, Greenspan wrote: "America is ... pursuing a policy of currency weakening.
"The suppression of the (Chinese yuan) and the recent weakening of the dollar are, of necessity, producing firming exchange rates in the rest of the world to, as they see it, the rest of the world's competitive disadvantage."
Geithner retorted: "I have enormous respect for Greenspan, had the privilege of working with him for a long period of years, but that's not an accurate description of either the Fed's policies or our policies, and again I don't think it's an accurate description of what's happening in markets today."