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U.S., Allies Slam Drop In Dollar But Finance Ministers Can’t Agree On Precise Rescue Plan

The United States and its major economic allies deplored the dollar’s weakness in international currency markets Tuesday but offered no concrete plan to shore up the beleaguered currency.

In a joint statement after more than five hours of talks, the finance officials pledged to continue efforts at economic cooperation that would stabilize jittery currency markets.

However, the statement offered no hint that any major policy changes were about to be undertaken.

Before the meeting, Japanese and German officials had urged the United States to boost interest rates further as a way of bolstering the U.S. currency, but the Clinton administration made clear that it did not favor higher rates.

In an interview published Tuesday, President Clinton termed of “questionable value” the idea that higher interest rates in the United States would bolster the dollar.

“We aren’t going to do ourselves any good to spark a recession here at home by raising interest rates further,” Clinton said.

The meeting of the world’s seven largest economies - the United States, Japan, Germany, Britain, France, Italy and Canada - came at a time of sharp bickering among the major partners.

Japanese and German officials have complained that the Clinton administration has failed to do more to support the dollar, which has fallen by 20 percent in value against the yen and nearly 15 percent against the German mark since the beginning of the year.

Japan and Germany are both worried that economic recoveries in their countries could be hurt if their export industries get priced out of foreign markets.