New York Federal Reserve BankPresident Gerald Corrigan opposed a further fall in the value
of the dollar but refused to say whether U.S. interest rates
would be raised to protect the currency.
    "A further decline in the dollar or appreciation of the yen
at this juncture I would regard as counterproductive," he told a
news conference.
    His comments echoed those made last week by U.S. Treasury
Secretary James Baker, who also warned against a further dollar
fall.
    Currency speculators and investors are convinced that a
further dollar fall is needed to help reduce the huge U.S.
trade deficit, dealers said, adding the only thing likely to
help the dollar is seen as a rise in U.S. Interest rates.
    Corrigan refused to say whether the U.S. was ready to risk
damaging its economic recovery by raising interest rates.
    The dollar's sharp drop this month has also raised
questions about the usefulness of recent meetings of the Group
of Seven. But Corrigan said: "They have played a constructive
role in so far as the broad objective of facilitating a higher
degree of economic policy coordination."
 Reuter
