WASHINGTON: The US government will not intervene to weaken the value of the dollar, despite persistent concerns about actions by other countries to influence their currencies, a top White House economic aide said Friday.
President Donald Trump met with his economic team in the past week and “we have, as a matter of policy, ruled out currency intervention,” said Larry Kudlow, head of the White House National Economic Council.
Kudlow disputed the claim that Trump wants a weaker dollar to ensure American exports are priced favourably against foreign competitors.
“I don’t agree with your assertion that the president wants a weak dollar,” Kudlow told CNBC said.
“He tweeted last week that the dollar is the dominant currency in the world and he wants it to stay that way.”
However, Trump is concerned about foreign countries that may be manipulating their own currencies lower to “try to gain some short-term temporary trade advantage. That we do not like.”
“In some cases, we think there is manipulation” by other governments, Kudlow said.
The US is growing faster than many of its major trading partners, and as those economies slow their currencies will tend to lose value, making their exports more competitive.
But the US Treasury’s twice-yearly report on currency practices has failed to find any cases of outright manipulation.
Demand for US currency remains high since investors worldwide buy dollar-denominated assets as a hedge against high inflation in their own countries, especially as US interest rates rise.
“The steady, reliable, dependable dollar is attracting money from all over the world,” Kudlow said. “We are the hottest economy in the world, and I expect us to stay that way.”