US Treasury Secretary Henry Paulson on Tuesday said he stood by comments made a day earlier in which he said he would never rule out currency intervention as a potential policy tool.

"I'll let my comments stand," Paulson said in an interview with Bloomberg Television. "I never like to say never, but my focus is on long-term fundamentals."    

He repeated that the long-term fundamentals of the US economy were strong, compared favorably to other major industrial economies and would show through to the dollar's value.

"I believe that those long-term fundamentals will be reflected in our currency value."    

Paulson said that was the same message that he would deliver to other finance ministers from the Group of Eight nations meeting in Osaka this coming weekend, although he declined to comment on whether the dollar's weakness and potential intervention would be a subject of discussion.

Asked whether Chinese officials may raise the topic of the dollar's weakness at a meeting with US officials next week in Washington, Paulson said: "I get a lot of questions but we again compliment them on the progress they've ... made in moving their currency."    

"It has appreciated almost 20 percent now and the pace of appreciation has accelerated but it still doesn't represent fundamental economics, so they've got farther to go," he said.

Paulson said a stronger yuan was in China's interest. "Right now, when they're fighting inflation, having a currency that reflects market values will be a valuable tool and I think they're beginning to see that." - Reuters