Geithner stresses dollar's global role

By Glenn Somerville

SINGAPORE (Reuters) - U.S. Treasury Secretary Timothy Geithner offered fresh reassurances to Asian nations that the Obama administration was committed to a strong dollar and to actions aimed at bolstering its value.

"It's very important to the United States that we have a strong dollar," he said at a news conference at the Asia-Pacific Economic Cooperation forum, or APEC in Singapore on Thursday. "As growth recovers, (we will) move our fiscal position back into balance."

Soaring budget deficits, which hit a record $1.4 trillion (846.3 billion pounds) in fiscal 2009 and will likely be near that in 2010, have weakened the dollar because of huge U.S. borrowing to meet the U.S.'s day-to-day spending needs.

As he did throughout the past week, at meetings of the Group of 20 in Scotland last weekend and in Tokyo earlier this week, Geithner acknowledged the U.S. carried a special burden for protecting the currency's value because it is the global reserve currency.

"We bear a special responsibility for being a source of stability and strength in the global economy and we are going to continue to be a voice for reform and we'll be a strong partner for countries in this region," Geithner said.

The dollar has declined 16 percent against a basket of six major currencies .DXY from the highs set in March and is down more than 37 percent from a peak in 2001.

Geithner dismissed a suggestion that pouring hundreds of billions of dollars worldwide into spurring economic activity might lay the ground for a future inflationary surge and said finance ministers must stay focussed on getting growth on more solid footing.

"Inflation is low and still moderating across most of the major economies," Geithner said. "The most important thing we need to be doing is try to make sure we are reinforcing this early recovery."