LEADING INDUSTRIAL NATIONS TO MEET IN APRIL
Leading industrial nations will meet
again next month to review their accord on currency stability,
but U.S. Officials said financial markets are convinced for now
the countries will live up to commitments to speed up economic
growth.
    The narrow currency movements of recent weeks strongly
suggests the six leading industrial countries have tamed the
normally unruly financial markets and next month's talks seem
likely to build on that stability.
    A Reagan administration official said the Paris agreement
last month was the main reason markets were calm.
    But he said in an interview that financial markets also
understood, "That all six countries concluded that the measures
to be taken over a period of time in the future should foster
stability of exchange rates around current levels. That is in
fact what has happened since Paris."
    Monetary analysts said stability has been helped in part by
the decision of industrial nations to bury the hatchet and
cease to quarrel over short-term policy objectives.
    Instead they have focused on medium-term policy goals, but
left room to adjust their agreements with periodic meetings.
    The official refused to comment, however, on whether the
agreement included a secret pact to consider further
coordinated interest rate cuts -- a measure industrial nations
have taken jointly several times in the past year.
    On February 22, the United States, Japan, West Germany,
France, Britain and Canada agreed that major currencies were
within ranges broadly reflecting underlying economic
conditions, given commitments by Washington to cut its budget
deficit and by Toyko and Bonn to boost economic growth.
    The shake-up would strengthen the U.S. Position in
future international talks.
    "I think these changes will strengthen the President's hand
politically and the stronger he is politically the better off
we are with the Congress and the better off we are in
international fora," said the official, an Administration
economic policymaker. "So it would be beneficial to the
continued conduct of our initiatives."
    But the official also said the Administration would resist
calls for a tax increase to cut the budget deficit -- a target
Europeans say is crucial to help curb economic instability.
    Last week, dealers said the Federal Reserve intervened to
stop the dollar rising against the mark, which had breached
1.86 to the dollar. British authorities are also understood to
have intervened to curb sterling's strength.
    International monetary sources say finance ministers and
central bankers, who will review market performance and their
own economic prospects, will reassemble again in Washington
just before the April 9 policymaking meeting of the
International Monetary Fund.
    The sources said Italy, which refused to join the Paris
pact, was invited back by Treasury Secretary James Baker.
    Since Paris, there are signs West German growth is slowing,
while U.S. Officials said they were giving Japan until April to
show that an economic stimulus package was in the offing.
    Signs of concern about German prospects emerged recently
when Bundesbank (central bank) president Karl Otto Poehl told
bankers he would consider cutting West German interest rates if
the Fed was ready to follow suit.
    A Reagan Administration official said this would show there
had been some change in approach on the part of the central
bank in Germany.
    But he declined to comment on the prospects for action by
the Fed and the Bundesbank.
    "If there is such a provision it is private and if I talked
about it, it would no longer be private," said the official, who
asked not to be identified.
    Public comments by Fed officials suggest the central bank
is keeping credit conditions broadly unchanged, but if the
major economies continue to show sluggish growth and the U.S.
Trade deficit remains stubbornly high, further coordinated
action could be on the April agenda.
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