Keeping up the pressure on China, the US and key European allies will push for market-oriented exchange rates at the annual meeting of the International Monetary Fund (IMF) this weekend, which will be attended by Finance Minister Pranab Mukherjee and other global finance leaders.
"The United States has been very consistent in its position that the leading economies should be supporting exchange rates based on market fundamentals and we will continue to support that position," a senior treasury official told reporters ahead of the IMF meeting.
"It's one that's been embraced by the G-20 and we expect that countries will continue to move towards honouring their full set of G-20 commitments," he added.
"There is a whole set of countries that agree with the basic tenets of the broader G-20 framework, as evidenced by their commitments in that context to a whole set of policies that really are critically important to allow adjustments to take place in the global economy," the official said.
"So I actually expected in our conversations this weekend and in the weeks ahead that there will be robust agreement around the critical importance of allowing adjustment to take place in the global economy.
"After all, it's in all of our interests to enable that rebalancing to occur so that as a group, we get on to a path that is more sustainable and more balanced going forward," the treasury official said.
The official said the IMF has noted that in today's environment, fiscal consolidation is likely to have more negative short-term effects that usual.
It has also concluded that if many countries adjust simultaneously, the output costs are likely to be greater, the official said, adding that this will be an important area of discussion.
"It's also vital to achieve more balanced global growth. That's why the United States has been working to address distortions in the pattern of global growth.
"That's why we're focused on ensuring G-20 countries implement their commitments to rebalancing, surplus countries no less than deficit countries, and include market-oriented exchange rates in the set of policy tools that are vital to achieving that rebalancing," the official said.
"As you know, as America saves more, those countries that were overly reliant on exports to the United States in the run up to the crisis will need to change their policies, or else global growth will slow and all of us will be worse off.
"The United States is committed to changing this pattern by creating a more balanced pattern of global demand and our partners in the G-20 are committed to doing the same," the treasury official said.
"At this stage, I think we need to make sure that we're actually implementing on our commitments in the G-20. And that will be a major topic of discussions this weekend and going into the G-20.
"The IMF of course has a very important role to play in this process through surveillance, particularly in ensuring progress towards rebalancing strengthens and that the international adjustment process is permitted to work," the official said.
