Geithner says strong dollar in U.S. interest

WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Wednesday that a strong dollar is in the United States' interest and that there were no signs foreign investors were tiring of buying U.S. government debt.

"I want to say this very clearly, a strong dollar is in America's interest. We are going to make sure to pursue policies that improve the long-term fundamentals of the U.S. economy," he told CNBC.

Geithner said there was "no evidence" foreign investors were losing interest in purchasing U.S. debt securities.

Earlier on Wednesday, the dollar slipped after Geithner said he was open to a proposal by China to increase the use of IMF Special Drawing Rights that some have seen as a suggestion they become the world's dominant reserve currency.

Geithner said there were some signs that sustained government efforts to stabilize the financial system were beginning to pay off.

"We've seen a lot of adjustment across the U.S. economy, across the global economy, and you're seeing the pace of deterioration start to slow in some areas," he said, but added it will take time to get over the current downturn.

In the meantime, Geithner acknowledged, more money may be needed for a U.S. bank bailout. He said there still is money in the $700-billion Troubled Asset Relief Program and that will be used quickly.

"But we always said this crisis may require more resources to deal with effectively, and we're going to make sure we work with the Congress over time so that we can do this on a scale that is going to bring recovery back as soon as possible," he added.

Geithner said China, which is now the single largest buyer of U.S. debt, was playing a "constructive" role in helping the global economy get through the current crisis by trying to keep its own economy performing well.

"The things they are doing to get their economy stronger, to encourage domestic demand growth, to allow further evolution in their basic financial framework, those things are very important, consequential policies and we're working very closely with them," he said.

(Additional reporting by Tim Ahmann and David Lawder; Editing by Andrea Ricci)