Dollar to keep global stature: Summers

WASHINGTON (Reuters) - Top White House economic adviser Lawrence Summers gave strong backing to the beleaguered U.S. dollar on Wednesday, saying it would remain the world's main reserve currency for the foreseeable future.

"The world does not, I believe, have a viable alternative to the dollar as a reserve currency and (the) broad political role the United States plays in the world very much supports the dollar ... as a reserve currency," Summers said at the Reuters Washington Summit.

"I think the dollar ... is going to be the world's primary reserve currency for ... the foreseeable future," he added.

Echoing comments made by Treasury Secretary Timothy Geithner at the Reuters summit on Tuesday, Summers said the "most important thing we can do for the dollar is make sure that it rests on strong fundamentals."

Summers, who heads the National Economic Council, speaks about the dollar infrequently and when he does, he usually defers to Geithner.

China, a major holder of U.S. Treasury securities, earlier this year openly questioned whether there might be a need for an alternative to the dollar as the global standard.

Summers said he takes seriously longer-term concerns about the high U.S. federal debt, and said that was why President Barack Obama's administration had made deficit reduction a central part of its healthcare reform efforts.

Summers and many other economists have warned that spiraling healthcare costs posed the biggest single threat to U.S. finances as the population ages.

The dollar, which has hit 14-month lows against a basket of currencies, has weakened as investors, who flocked to the currency as a safe haven at the height of the 2008-2009 financial crisis, have been steadily unwinding those positions.

The soaring U.S. budget deficit and concerns that it could lead to higher inflation have also hurt the dollar.

The deficit reached $1.4 trillion in the 2009 fiscal year that ended September 30. That amounts to 10 percent of the economy, the highest share since the end of World War II.

Forecasters believe the deficit will remain high in the coming years.

"I take very seriously longer term concerns about federal indebtedness," Summers said, adding that the deficit spending on items like the $787 billion economic stimulus were needed in the short-term to help the economy.

He said that the budget that Obama will unveil in February would focus on making sure that after the economy recovers, debt levels will be on a sustainable, steady or declining path.

(Reporting by Caren Bohan, Jeff Mason and Simon Denyer; Editing by Anthony Boadle)