The American dollar "may remain a very strong currency" even if the budget deficit is trimmed and interest rates recede, a leading international financial official said yesterday.
Emile van Lennep, retiring secretary-general of the Paris-based Organization for Economic Cooperation and Development, said the theory that "it is just this budget deficit which artificially keeps this dollar rate in the air is certainly a very one-sided and inadequate argument."
Echoing an explanation repeatedly offered by Treasury officials, Lennep said that the investment opportunities in a strong economy may be just as important in sustaining the dollar, which again rose to new highs in world exchange markets yesterday.
Lennep, who paid a courtesy call on President Reagan prior to his Oct. 1 retirement after 15 years at the OECD helm, explained the dollar rise this way:
"It remains a profitable business to invest in a highly profitable economy. As long as the market feels that you can make money in the United States, more than investing in Europe or in Japan, then people will be inclined to buy the currency needed for such investments. And the high interest rates might be a reflection of that concern."
Lennep added that when he was in Japan a few weeks ago, he found that Japanese investors -- despite the favorable growth of the Japanese economy -- "want to invest in the United States. That's the place to invest they said , it's more profitable to invest there than here in Japan ."
A dollar decline, Lennep said, might develop when Europe and Japan become more profitable investment centers. He noted that recent "unfortunate events in West Germany" -- labor troubles -- have resulted in a loss of confidence that triggered a flow from deutschemarks into dollars.
Lennep, who also met with Secretary of State George Shultz and Treasury Secretary Donald T. Regan, said he urged the president to take the leadership in helping to create a more open world trading system. He congratulated Reagan on the administration decision to reject copper import quotas, and urged him to stand firm on similar touchy questions in steel, autos, and textiles.
"I told the president that I'm worried that if the trading system goes in that protectionist direction, we will be protecting the inefficient industries."
He said he also told Reagan that there is a renewed commitment among European countries to return to solid economic growth and to "restore economic health" without reverting to policies based on stimulating short-term demand in a frantic effort to cut the unemployment rate.
But he emphasized repeatedly that while the European economies have picked up in the past year -- aided in no small measure by exports to the United States stimulated by cheaper European currencies -- the structural problems of most European countries are far from solved.
OECD economists are still predicting a softening economy in 1985, he said, with growth rates of only 2 to 2.5 percent in the industrial nations. But this range may be boosted a bit when the unexpectedly fast performance of the U.S. economy so far this year is computed in.
He told the reporters that "the new consensus" in Europe aimed at a "better reconciliation of social and economic objectives" would have "painful" economic and political consequences, especially high unemployment rates for another period of time. But he said that under the OECD's leadership, most national leaders now agree that to become competitive with the United States, labor and management practices must become "more flexible."
He said that European nations have come to understand that social objectives can't be pursued while ignoring their impact on national budgets. "Equity and efficiency don't always coincide," he declared.
"In the 1960s, we used to think that economic growth would take care of it all; now, we know that it can't." Increasingly, he added, European governments have become keenly aware of the "dynamism" of the U.S. economy, especially the success of the private sector in creating jobs.
Lennep will be succeeded by Jean-Claude Paye, a career French civil servant with a treasury/financial background who is a longtime associate of former prime minister Raymond Barre.