Balanced US Dollar favoured!

A WEAK dollar policy won't help revive the US economy, and currency fluctuations are best left up to the marketplace, the head of a top American business lobby said on Friday.

The dollar has sunk to a 13-year low recently against the Japanese yen, trading at below 90 yen, a decline that could help US exporters by boosting their competitiveness in world markets. A weak dollar makes American products cheaper overseas.

Mr Thomas Donohue, president and chief executive of the US Chamber of Commerce, said that view was one-sided.

A weak dollar can hurt other parts of the economy in discouraging capital inflows and eroding the purchasing power of American businesses.

'If you leave it to the market, it goes up and down,' he told reporters, adding that governments and central banks don't need to intervene. 'If you start to manage currencies, it creates more difficulties than it creates benefits.'

Mr Donohue's visit to Japan is part of a trip to Asia, including China and South Korea, to exchange views with political and business leaders on the global recession, the fight against protectionism and efforts to boost world trade.

He said he will urge Japanese Prime Minister Taro Aso to make sure Japan, along with alliance partner the US, does its part with stimulus packages and efforts to open trade to battle the downturn.

Striking an optimistic note, Mr Donohue said the US economy will begin to rebound by the middle of the year and a recovery can be expected by 2010, although it will contract through the first quarter. Source - ST.