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. The U.S. Currency plunged to a post-war low below 140 yen
last week, despite dollar-buying by a number of central banks.
    Currency speculators and investors are convinced that a
further dollar fall is needed to help reduce the huge U.S.
Trade deficit, dealers said. 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
