(Recasts with Obama comments)
By Lesley Wroughton and David Lawder
WASHINGTON, March 24 U.S. President Barack
Obama and his top two economic officials on Tuesday dismissed
suggestions by emerging economic powers that the world move
away from using the dollar as the world's main reserve
"I don't believe that there's a need for a global
currency," Obama told a prime-time televised news conference,
adding that the dollar is "extraordinarily strong right now".
The International Monetary Fund said earlier that the
single global currency idea highlighted concerns about the
stability of the global financial system, after both China and
Russia earlier urged an overhaul of the global monetary system.
In a congressional hearing on Capitol Hill, U.S. Rep.
Michele Bachmann, a Minnesota Republican, asked U.S. Treasury
Secretary Timothy Geithner: "Would you categorically renounce
the United States moving away from the dollar and going to a
global currency as suggested this morning by China and also by
Russia, Mr Secretary?"
Geithner replied, "I would, yes."
She posed the same question to Federal Reserve Chairman Ben
Bernanke, who said: "I would also."
Chinese central bank chief Zhou Xiaochuan on Monday urged a
wider use of Special Drawing Rights created by the
International Monetary Fund as a global reserve asset in 1965.
Zhou's comments followed remarks by Russia last week which
said it would put forward a proposal at a meeting of the Group
of 20 in London on April 2 for the creation of a new global
Russia said its proposal had broad support among other key
emerging market economies including Brazil, India, China, South
Korea and South Africa.
Obama was asked during his news conference about concerns
expressed by Chinese officials over the dollar, the growing
U.S. budget deficit and the safety of Beijing's $740 billion
holdings in U.S. Treasury debt.
He answered by saying that U.S. dollar strength reflected
growing confidence in America's prospects and in steps taken by
his administration to revive the economy and shore up housing
and the financial system.
"The reason the dollar is strong right now is because
investors consider the United States the strongest economy in
the world with the most stable political system in the world,"
"You don't have to take my word for it. I think that there
is a great deal of confidence that ultimately, although we are
going through a rough patch, that prospects for the world
economy are very, very strong."
Australia's Prime Minister Kevin Rudd also knocked down the
global currency idea, telling a Washington audience late on
Monday that the dollar's position as the reserve currency
IMF TAKES LONG VIEW
IMF First Deputy Managing Director John Lipsky said on
Tuesday that while the discussion about a new reserve currency
was not a new one, it underscored a general concern about the
strength of the world's economic and financial system.
"These kinds of discussions of alternative reserve
currencies have been around a long time, some very serious
people have proposed them, but I don't think any of them are
considered a near-term option," he told Reuters Financial
Television in an interview.
"It's a very complicated and big proposition but it is part
of a natural conversation about how the stability and
effectiveness of the current international system can be
strengthened," Lipsky said.
He earlier told a news conference the discussion of changes
in IMF lending instruments and the reserve currency idea should
not be dismissed outright.
"It's a serious proposal and I don't think even the
proponents think of it as a short-term issue but rather a
long-term issue that merits serious study and consideration,"