(Bloomberg) -- Treasury Secretary Janet Yellen highlighted commitments by Group of Seven nations backing market-set exchange rates when asked about recent remarks by former President Donald Trump that blamed a strong dollar for hurting US export competitiveness.
“Over the last several years, the United States has had tight monetary policy,” with higher interest rates than in other parts of the world, Yellen said at a press conference Thursday in Rio de Janeiro. “That’s induced capital inflows that have strengthened the dollar — that’s really something to be expected” in the case of a strong economy and a central bank working to contain inflation. “We believe that’s how the system should work.”
Trump, in an interview with Bloomberg Businessweek, highlighted a “big currency problem” with the dollar. He said he keeps hearing from manufacturers that “nobody wants to buy our product because it’s too expensive” – while other countries try to keep their currencies “weak all the time.”
Yellen noted that the G-7, of which the US is a member, has committed to market-determined exchange rates, with interventions only occuring ing situations of undue volatility, and in consultation with partners.
Over time, fundamental economic attributes get reflected in exchange rates, she said in Rio, where finance ministers from Group of 20 nations have gathered to discuss a range of global issues from hunger and climate change to taxation and pandemics.
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