Obama defends US dollar policy ahead of G20

US PRESIDENT Barack Obama responded to widespread criticism that the United States is deliberately weakening the dollar as he tried to swing the G20 spotlight back onto global imbalances at a gathering of world leaders in Seoul.

The US easy-money policy has been under fire since the Federal Reserve announced last week it would pump an additional $600bn (£372.4bn) into the economy. In an attempt to ease tensions, Treasury secretary Timothy Geithner said he was optimistic the G20 could reach a deal to limit trade imbalances during a two-day summit due to conclude today.

Obama, in an attempt to take his own country’s policies out of the glare, said a strong US economy was vital to the global recovery and urged his G20 counterparts to put aside differences and help promote economic growth.

“When all nations do their part - emerging no less than advanced, surplus no less than deficit - we all benefit from higher growth,” Obama said in a letter sent to G20 leaders.

The bridge-building came after a day of heated arguments as negotiators struggled to hammer out a statement that all G20 leaders could sign.