WASHINGTON (AFX) - US Treasury Secretary Paul O'Neill reiterated that the government's strong dollar policy has not changed. In a television interview with CNBC, O'Neill said the administration is continuing the same dollar policy, and that the US economy has now put seven months on inventory correction behind it. "One of the things that I've learned in this job... is that there is no upside in talking about the dollar except to say that we have a continuing, continuous policy," O'Neill said.
"We've still got the same dollar policy," O'Neill stressed. The US dollar has weakened sharply against the euro this week, as well as declining against other major currencies, in reaction to concerns that the US economy could be on the verge of a recession. Economists say that US second-quarter GDP growth could be revised to show flat or possibly negative growth on Aug 29, and the White House has been coming under pressure from US manufacturers to drop the longheld strong-dollar policy, which the industry says is hurting its exports.
O'Neill also said that the economy has now put seven months of inventory correction behind it, and that the economy would move back toward its potential between year-end and the first quarter of 2002. Asked for his thoughts on Argentina's ongoing economic crisis, O'Neill said that the IMF has the lead role in dealing with such matters, but that the Treasury Department is "paying day-to-day attention to the things that are going on in Argentina."
Argentine Finance Secretary Daniel Marx conducted a sixth straight day of talks today with IMF officials here in a bid to secure a new loan agreement to underpin an existing 14 bln usd IMF loan program which is due to expire later this year.