U.S.' Lew says UK authorities need time to probe pound crash

Jack Lew, United States Secretary of the Treasury, is seen during a meeting with students at Autonomous Technological Institute of Mexico (ITAM), in Mexico City, Mexico, September 29, 2016. REUTERS/Edgard Garrido
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  • Jack Lew
    76th United States Secretary of the Treasury

WASHINGTON (Reuters) - U.S. Treasury Secretary Jack Lew said on Friday it was necessary to give British authorities some time to determine what drove a steep drop in the pound before jumping to conclusions.

"Based on our own experience, it takes some time to find out why such movements occur," Lew told a news conference at the International Monetary Fund and World Bank Meetings in Washington.

The pound's fall by more than 10 percent against the dollar to below $1.15 was not in line with a largely stable exchange rate picture in recent weeks, Lew said.

"In general, we've seen exchange rates behaving in a stable way globally responding to macro-economic movements," he said.

Lew said that despite some rhetoric coming from British politicians in favor of a "hard Brexit" with less economic integration and more immigration restrictions, the Obama administration continues to recommend for "the parties to remain in an amicable discussion, in pursuit of a highly integrated outcome."

The more that UK-EU separation discussions provide a sense that such an outcome will occur, the more confidence it will instill in markets, Lew said.

The U.S. Treasury chief also said that many more countries are now willing to take additional steps to boost chronically weak growth.

He praised Japan, China and Germany for recent fiscal steps they have taken to boost consumption, but said South Korea could do more. Most countries, even those with constrained budgets can take some steps to increase growth, he said.

"There are more tools that could be used to help stimulate global growth," Lew said.

(Reporting by David Lawder and Leika Kihara; Editing by Andrea Ricci)

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