'Long live the dollar'

New York - US Treasury Secretary Timothy Geithner said on Tuesday the dollar would keep its status as the world's main reserve currency a "long time".

Geithner, speaking to an investors conference in New York a day after the dollar hit a 14-month low against the euro, said: "The dollar will remain the principal reserve currency for a long time."

The dollar has nosedived in recent months as investors turn away from the greenback, considered a safe haven amid economic uncertainty, amid a burgeoning recovery from a severe global slump.

The dollar's status as the primary reserve currency has come under fire as it weakens, particularly from China, whose foreign exchange reserves surged to a global record of $2.27 trillion dollars at the end of September.

China has invested a large part of the reserves in US dollar assets, such as safe but low-yielding US Treasury bonds, but Beijing has tried to diversify its investments to improve its returns amid the global financial crisis.

Geithner said the US economy, which officially entered recession in December 2007, is in a "much stronger position than it was but it's a mixed picture".

He said that though businesses were finding it tough to get credit, "all broad measures of confidence are better" and the price of credit had dropped.

"We've achieved this initial sign of recovery much faster than expected and during past crises," he added.

- AFP