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Regan: Money shift in Europe could aid US foreign trade

The dollar may weaken and foreign-exchange markets should calm following a realignment of European currencies, US Treasury Secretary Donald T. Regan says. While noting that a host of factors affect currency values, the Treasury secretary told reporters that ''all other things being equal, we should have a settling down of exchange markets and perhaps a weakening of the dollar.''

In early trading Monday the dollar opened sharply higher against both the franc and the mark.

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A weaker dollar would help the US balance of trade by enabling US companies to sell more products abroad. Such sales would be easier to make because foreign buyers would pay less to acquire the dollars needed to buy US goods.

At the same time, a weaker dollar would make imported goods more expensive for Americans.

The realignment of European currencies Monday shows a need for more uniformity in economic planning, Mr. Regan argues.

''What this really indicates is that there is a need for conformity in the economies of various nations. . . . It is quite clear that when one nation diverges from the others in the way it runs its economy, you then have to realign currencies to reflect that.''

Mr. Regan seemed to be referring to France's attempt to reflate its economy while the rest of Europe was still in recession. The effort triggered high inflation, a weak franc, and a trade deficit. In the week ending March 10, France spent some $3.38 billion of its currency reserves in an effort to keep the franc from moving more than 2 1/4 percent below its previously assigned relationship to other currencies in the European Monetary System.

The United States has no plans to intervene in currency markets, Mr. Regan says. ''I don't know why we should gum up what they are trying to do.''

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