MIAMI: US Treasury Secretary Jacob Lew said on Friday (Mar 20) that the surge in the US dollar represents the gains made by the economy and is good for the country.
“A strong dollar is good for America, it reflects a strong US economy,” Lew said at a round-table discussion in Miami.
US exporters have begun complaining that the dollar, which has gained about 20 per cent against a trade-weighted basket of currencies in the past year, is starting to undermine their competitiveness with rivals around the world.
And on Wednesday, Federal Reserve Chair Janet Yellen said the dollar’s negative impact on exports amounts to a drag on economic growth, albeit not a large one.
But Lew said the US economy can handle that. “Overall right now the US economy is doing well and you are seeing demand strong. And (it is) looking like it’s going to stay strong,” he said.
He said though that economies elsewhere need to stimulate demand where they can to support growth. “I think that Europe needs to do some things to trigger demand. They’ve now employed monetary policies, they’re talking about reforms, (but) they need fiscal policy as well.”
“Their economies would come back, and when their economies come back, you will see some movement in relative currency value, because our economy won’t be so much stronger on a relative basis.”