Washington: Federal Reserve Chairman Ben Bernanke has said that the central bank will monitor the sliding US dollar but pledged anew to keep interest rates at record lows to nurture the economic recovery.
In remarks to the Economic Club of New York yesterday, Bernanke engaged in a delicate dance. He tried to bolster confidence in the dollar without taking any real action.
''Bernanke is trying to use words, not interest rates, to prevent the dollar from going even lower,'' said Jay Bryson, global economist with Wells Fargo Securities.
Bryson and other analysts said they did not think Bernanke was signaling that the Fed would join with central bankers in other countries to intervene in markets to strengthen the dollar. That is an option for the Fed if the dollar were to start plunging.
Bernanke's remarks gave a brief lift to the dollar in trading Monday. But it resumed its fall after traders focused on his assertion that the central bank would hold interest rates low for an extended period. The dollar has posted double-digit declines against other major currencies since spring.
Bureau Report
First Published: Tuesday, November 17, 2009, 10:12