U.S., Industrial Allies Urge Dollar Curbs Before IMF Talks

The United States and its six major economic allies declared Saturday that the value of the dollar has risen too high in recent months and vowed to continue intervening jointly in the world’s foreign exchange markets to keep it from climbing further.

In a regularly scheduled session on the eve of Monday’s annual meeting of the International Monetary Fund, finance ministers and central bankers of the seven countries reaffirmed the same upper and lower limits for the dollar’s value that they have maintained for 21 months.

“The rise in recent months of the dollar (is) inconsistent with longer-run economic fundamentals,” the group said in a formal communique. It warned that a further rise of the dollar above current levels “could adversely affect prospects for the world economy.”

It was not immediately clear what impact the group’s decision would have over the next few weeks. The dollar has been rising steadily since last spring and now is well above the ceilings that the Group of Seven--as the ministers’ group is known--have been maintaining.

Expectations were that the United States and its allies would intervene heavily in the foreign exchange markets in the next few days if only to offset any tendency by the markets to interpret Saturday’s decision as a green light to push the dollar still higher.

But the allies already have been selling dollars heavily in recent months in an effort to keep the dollar from rising further, and so far they have been unsuccessful. The U.S. currency has been above the upper limit they set for it for several weeks.

Contrary to hopes by some U.S. strategists, the ministers apparently rejected any notion that the seven seek to reverse the dollar’s rise by changing interest-rate levels in each of the major countries--a move designed to ease demand for dollars and drive their value down.

Such a plan would have involved increases in interest rates in West Germany and Japan and--possibly--a simultaneous drop in interest rates here at home. But while Japan reportedly agreed to go along, West Germany demurred and the Federal Reserve Board declined.

At a briefing for reporters, Treasury Secretary Nicholas F. Brady said the ministers--along with the governors of each country’s central bank--had agreed not to answer any questions on the dollar beyond the language in the communique.

On the face of it, the language that the finance ministers used was stronger than that that the ministers used in their last public communique, in April, when they warned only that “a rise of the dollar which undermined adjustment efforts . . . would be counterproductive.”

But Saturday’s communique, which declared that the dollar’s recent rise had been “inconsistent with longer-run economic fundamentals,” gave no hint of any new measures or policy changes beyond the intervention that the seven already have been pursuing since the trade deficit peaked in 1986.

The Group of Seven, as the ministers and central bankers are known informally, has been under heavy fire recently amid increasing questions about the credibility of its efforts to keep exchange rates stable as promised.

Besides the United States, the Group of Seven includes West Germany, Japan, Britain, France, Italy and Canada.

Analysts say the dollar has been rising for several reasons, among them sharply higher interest rates and lower inflation rates in the United States, political controversy in West Germany and Japan and perceptions of America as a haven for investments.

But economists have been warning recently that if the dollar’s value rises much further, it could make U.S. exports less competitive and increase demand for imports. IMF ROLE CRISIS

The International Monetary Fund sees its future role in doubt. Business, Page 1