Published: Thursday, 12 Nov 2009 | 6:24 AM ET

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The US government will likely borrow substantially less than initially anticipated, with banks repaying the funds they received during the crisis with interest and more "significant repayments" are ahead, Treasury Secretary Timothy Geithner told CNBC Thursday.

"We are likely to have to borrow substantially less than we initially anticipated to help repair the damage to our financial system," Geithner told CNBC in Singapore.

There is also confidence that the US government will bring its fiscal balance in line as growth recovers, he said.

There are signs that stability is returning as Americans save more, the current account imbalance is coming down and there is much greater confidence in the stability of financial system, Geithner added.

Photo by: Pete Souza Timothy Geithner

He also reiterated his stance that a strong dollar is in the country's interests.

"We are committed to working with countries around the world to make sure that we have a recovery in place, we have a more stable financial system, we have a more balanced pattern of growth globally," he said. "A strong dollar is part of that commitment."

Geithner attended a meeting of finance ministers from Asia-Pacific countries in Singapore, ahead of the start of US President Barack Obama's visit later Thursday.

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There is very strong consensus regarding the importance of the Asia-Pacific region moving, over time, to "more flexible market-driven exchange rates," Geithner said after the meeting.

Some analysts have said one of the causes of the global financial imbalances was the fact that the Chinese currency was kept artificially low because of China's restrictions on capital flows and the fact that the yuan is not a free-floating currency.

This has helped Chinese exports, creating the huge trade imbalance between China and the US, according to analysts.

Growth led by domestic demand and a shift to more market-oriented, flexible exchange rates over time are very important for the Asia-Pacific region and for the world economy, Geithner said.

The dollar was flat on Thursday but it has dropped at a steady pace over the past weeks as traders bet that the Federal Reserve will not raise interest rates any time soon.

Geithner did not want to comment on the dollar's current value, but said markets have recovered from the period when the world was facing risks of depression, deflation and financial collapse, which had caused a big rush into US financial assets.

"You're seeing as confidence returns, investors, savers around the world starting to take risk again, that's a fundamentally healthy thing, it's encouraging," he said.

Progress is being made on the legislative front to make sure banks will no longer be able to take the risks that plunged the world into crisis, Geithner said.

"We're going to make sure we put in place comprehensive, fundamental reform of the financial system so you don't see a repeat of the kind of excessive risk-taking that led to this crisis cause so much damage to economies including the US and around the world," he said.

"We've got to do it on a global basis, these markets are global," Geithner added.

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