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.
   REUTER...
  

