(Bloomberg) -- Treasury Secretary Janet Yellen said that it’s understandable the dollar has appreciated amid rising US interest rates, and that these gains have posed a concern for some other countries.

“From the standpoint of the administration, we’re committed to a market-determined exchange rate,” Yellen said at a press briefing in Bonn, Germany, on Wednesday. “It’s understandable that the dollar has risen” as higher US interest rates spur capital toward the greenback, she said. She also cited “safe-haven” flows amid highly uncertain times. 

While the Treasury chief has declined to adopt the “strong-dollar” policy followed by some of her predecessors, her remarks Wednesday showed little concern with recent gains in the currency. The appreciation is an aid to US policy makers as they try to rein in surging inflation, and Federal Reserve Chair Jerome Powell has separately endorsed a tightening in US financial conditions -- of which a strengthening dollar is a part.

The Bloomberg Dollar Index earlier this month reached its highest since the stress of spring 2020, when the Covid-19 crisis erupted. For many emerging and developing nations, the gains are making it more costly to service dollar-denominated debt. Even for some advanced nations, such as Japan, the decline in their own currencies against the dollar has been unwelcome, in adding to inflationary pressures.

“There are many countries with dollar-denominated debt, and a rising dollar makes it more difficult for countries to bear that debt,” Yellen said. “We know that often emerging markets worry about how they will fare in an environment of higher interest rates and tightening monetary policy.”

The impacts on other countries “is a concern,” she said. For the US, the key is “to keep our neighbors well informed” about Washington’s policy stance. It’s “an important strategy for helping our neighbors adjust,” she said. 

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Yellen was speaking ahead of a meeting of finance chiefs from the Group of Seven advanced economies in Bonn May 19-20. Among her priorities at the confab is securing a commitment to large-scale reconstruction funding for Ukraine and shoring up a global corporate-tax deal. 

The US is enjoying “a great deal of economic momentum” that’s allowed it to outpace most peers, Yellen noted. “We have inflation -- obviously the Fed is tightening monetary policy to address it -- and we’re in a global environment in which there are significant risks and pressures. But I really don’t expect the United States to fall into a recession.”

(Updates with comments on avoiding recession in final paragraph and further context throughout.)

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