US Treasury Secretary John Snow insisted on Friday there has been no weakening in the United States' commitment to a strong dollar and vowed to hold China's "feet to the fire" over promises to make its currency more flexible.
On CNBC Television, Snow was asked whether the Bush administration has become less forceful in advocating a strong dollar and so effectively has endorsed a decline in its value.
"I don't think so, it's the policy. It's in our interests," Snow said. "But we also say as well that currency values should be set in open, competitive currency markets, to be in line with underlying supply and demand and market forces," he added.
Following the Group of Seven finance ministers' meeting in Washington on April 21, many analysts felt the ministers were willing to see the dollar's value decline as part of an effort to reduce global imbalances, including the US trade deficit.
Snow insisted that Washington still backed a strong dollar.
"It's a policy we've made clear, that Japan signed on to, the statement coming out of the G7 (finance) ministers' meetings, which said open, competitive markets are the best way to set currency values," Snow said, adding: "I say our policy is the strong dollar."
He also said that neither the United States nor other key trade partners should follow "beggar-thy-neighbour" currency policies that seek to gain an advantage by pricing exports unfairly cheaply.
Snow was asked why the Treasury Department declined to name China a currency manipulator in a report to Congress last week, given the huge deficits the United States is incurring on its trade with China and congressional anger over the issue.
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