Bonn backing for dollar

Press, 1 October 1979, Page 8

Bonn backing for dollar

[NZPA-Reuter Hamburg | The United States Treasury Secretary (Mr William Miller) and the Federal Reserve Board chairman (Mr 'Paul Volcker) flew to Belgrade yesterday after winding a pledge from West I Germany to underpin the (ailing United States dollar.

I A joint statement after [their four hours of talks with Chancellor Helmut [Schmidt and West German [finance chiefs, said the two [countries had agreed to coordinate support of the United States currency, now [at its lowest level this year ’against the mark. [ It said Bonn and Washington saw a mutual interest in [halting the dollar's decline, [as part of bringing about [wider currency stability. • The questions of currency I stability and how to replace [ the United States dollar as ! the principal world reserve currency will be key issues I at this week’s annual meetlings of the International [Monetary Fund and its associate body, the The World

Bank, in Belgrade. The West German Finance Minister (Mr Hans Matthoefer) said on his arrival in the Yugoslav capital that he thought the -United States dollar was heavily undervalued, but that only slight intervention was necessary to stabilise it on foreign exchanges. The West German Central Ban) bought SUS2I.BM on Friday in an unsuccessful attempt to prevent the United States currency from losing ground. The United States-West German statement, which Mr Miller and Mr Volcker were not prepared to comment on, called for a stronger role for the special drawing rights, the I.M.F.’s “paper gold,” held by central banks instead of bullion reserves. The statement also gave backing to further study at Belgrade of the substitutionaccount concept, which would provide an alternative reserve unit for countries not wishing to hold unstable dollar reserves.