IMF says US external position modestly weaker but dollar still 'heart' of global economy

WASHINGTON, March 3 (Reuters) - The U.S. needs to reduce its current account deficit and has a weakened position relative to desirable policies, the International Monetary Fund's number two official said on Tuesday, but the dollar remains the "heart of the international monetary system.

IMF First Deputy Managing Director Dan Katz told a Milken Institute conference that the U.S. external position is modestly weaker than what would be implied by desirable or fundamental policies.

"And so the US, certainly, from the Fund's perspective, should be reducing its current account deficits, and, you know, evaluating a wide range of policy measures to do so," Katz said.