The Clinton administration mounted a strong defense of the dollar Thursday, pledging to do whatever is necessary to protect the dollar's premier position on world currency markets.
The remarks by Treasury Secretary Robert Rubin marked the administration's most detailed comments since the dollar started plummeting to record lows against other currencies a week ago.Speaking to the National Newspaper Association, Rubin said he wanted to make "absolutely clear" that the administration "believes a strong dollar is in America's national interest."
"This administration from its beginning has been, and remains, fully committed to the sound monetary and fiscal policies necessary for sustained growth, low inflation, a strong and stable dollar and maintenance of the dollar as the world's principal reserve currency," Rubin said.
The currency turmoil of the past week had raised concerns that the dollar's position as the top reserve currency could be threatened if other foreign governments decided they would rather keep spare cash in, say, the German mark or the Japanese yen, which have been gaining in strength against the dollar.
Rubin's comments were designed to assure other countries that the United States was committed to maintaining the dollar's historical role in global currency transactions.
In a specific message to currency speculators, Rubin said, "Our policy is to intervene when it makes sense and not to do so when it doesn't."