Geithner denies currency manipulation

In a CNBC interview, Geithner said, "The United States would never do that. We will never seek to weaken our currency as a tool to gain competitive advantage or grow the economy. It's not an effective
strategy for any country and it's not for the United States."

The Obama administration has been the brunt of international criticism for the past week following the Federal Reserve's announced plan to buy $600 billion in long-term Treasury bonds, which is defined as quantitative easing or "printing money," because the Fed uses new money to make purchases. Putting new dollars into circulation adds liquidity to the financial system, but also dilutes the value of the currency.

Geithner said the "dominant trend" of the past 2 1/2 years has been the dollar gaining strength. In addition, he said he was "very confident" global leaders would come around and "embrace" the concept of rebalancing international trade by constructing policies that would tie trade surpluses or deficits to market forces.

The concept has been under debate at the Group of 20 summit in Seoul this week. Predictably, it has been rejected by trade-positive nations and been given a better reception by trade-negative nations.

"It's worth stepping back to see what are the basic objectives of this proposal," Geithner said.

"We don't set in motion the types of forces that could lead to a re-emergence of excessive imbalances around the world, deficits and surpluses, because those would threaten future growth. ... That's why it matters we have more balance as countries grow, provided a proposal that allows for a cooperative framework to manage through those kinds of things," he said.

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