In an exclusive interview with CNBC’s Maria Bartiromo, Treasury Secretary Tim Geithner says the US needs to work to keep its status as the world’s currency, amid chatter that the greenback’s position of preeminence or superiority is in danger. In fact, China and Russia have both called for a global super currency.
During the interview Geithner was asked by Bartiromo if he would expect, at some point, the dollar not be the world reserve currency.
“I wouldn’t”, he replied, “but I think it’s right, and I say this all the time, that the dollar’s role in the system and for special obligations and responsibility and us as a country, and it is very important…to understand that we need to do everything possible to sustain confidence in our ability to keep the inflation, low and stable it over time and to make sure we’re getting our fiscal house in order. That’s a really important thing to confidence, generally. We take that very seriously, nobody more than me.”
Bartiromo then asks Geithner what has he done specifically to safeguard the greenback’s decline.
“Well, I think, Maria, if you look generally, you know, I don’t…talk about developments in the exchange markets…I generally don’t do that, but I think if you look at what’s happened over the last year, you’ve seen really a lot of confidence in the U.S. finance, a lot of confidence in the U.S. economy. When the crisis was at its peak, when people were most concerned about the risk of collapse and deflation, what happened then? The world wanted to be in Treasuries, in the safest, most liquid markets, and you saw the dollar rise when people were most concerned about the future of the world. And that is a very important thing. It’s not something we can count on, so we need to make sure that we understand and we.. continue to foster, and again, we’re going to do that.”
