LAWSON SAYS SOME COUNTRIES COULD CUT RATES
  Nigel Lawson, Britain's Chancellor of
  the Exchequer, said some countries may need to cut interest
  rates with the aim of maintaining exchange rate stability.
      Speaking to journalists one day after the Group of Seven
  countries reaffirmed goals set in Paris six weeks ago, he said
  central banks would continue to intervene "as and when
  necessary."
      He said the G-7 countries were concerned that Japan do more
  to stimulate domestic demand and welcomed measures outlined by
  Japanese Finance Minister Kiichi Miyazawa yesterday.
      Lawson said he was still worried about  the risk of a
  simultaneous recession in the United States, Japan and West
  Germany, though less so than when he gave his March 17 budget
  speech to the British Parliament.
      "If anything I'm a little bit less concerned, but there is
  still a risk," he said.
      Asked if the United States should consider increasing
  interest rates to support the dollar, he said, "If there is a
  need for changes in relative interest rates, it doesn't need to
  be a rise in interest rates in the United States."
      Lawson said there was some concern expressed in yesterday's
  meetings at the slow progress the United States had made in
  reducing its budget deficit.
      "We believe there will be some worthwhile progress in
  reducing the deficit this year. The important thing is that it
  continue year after year," Lawson said.
      The February 22 Louvre accord called for efforts to
  stabilize currencies at then-current exchange rates. In the six
  weeks that followed the Japanese yen continued to rise against
  the dollar despite massive central bank intervention.
      Asked whether this intervention was a sign of weakness in
  the Louvre accord, he said, "I don't think so. If there had been
  no intervention you would have called that a sign of weakness."
      Although intervention could be a cause of inflation, Lawson
  said, "the world does not appear to be in an inflationary mode
  ... but one has to be vigilant."
      He said yesterday's G-7 statement, which affirmed that
  "current levels" of exchange rates were appropriate, had been
  "carefully worded." "We know what we mean, and we all mean the
  same thing," he said.
      Lawson said financial markets seem to believe that Japanese
  measures outlined in the Louvre accord were the source of
  weakness for that agreement.
      Therefore, the G-7 countries welcomed Miyazawa's
  presentation of plans for a supplemental budget to stimulate
  domestic demand.
      They particularly welcomed the goal of an immediate
  increase in public works spending, but Lawson said the package
  also involved a second stage to increase expenditures during
  the second half of this year.
  

