Treasury Secretary Henry Paulson said today that the United States is following a strong dollar policy and that he expects the nation’s economy to rebound, Reuters reported.

Paulson pointed out that the U.S. economy’s long-term strength should aid the currency. But Paulson warned that some aspects of the subprime mortgage crisis would become worse before improving, in a radio interview in Cape Town, South Africa. Paulson is in South Africa for a weekend meeting of finance chiefs from the Group of 20 economies, some of whom have concerns about their ability to export because of the dollar’s dropping value.

The dollar has decreased 9 percent compared to a basket of major currencies, reaching record lows in 2007 largely because of dismal projections for U.S. economic growth during a sharp housing sector slowdown. Paulson said the United States was making progress in working through financial turmoil stemming from the subprime mortgage market.

“We have very much a strong dollar policy … that’s in our nation’s interest,” Paulson said. “Our economy, like any other, goes through its ups and downs, but I believe the U.S. economy will continue to grow and its long-term strength will be reflected in our currency markets.”