A top Federal Reserve official said in his last speech on Wednesday that the U.S. dollar won't lose its status atop world currencies, and took a parting shot at the central bank's ultra easy policies.
The dollar will be the reserve currency of the world for some time to come, said Kansas City Fed President Thomas Hoenig in his final speech in office. He retires on October 1.
Hoenig, a long-time critic of the central bank's aggressive efforts to support the struggling economy, said the policies have been harmful.
When you encourage consumption by inhibiting your interest rates from rising to their equilibrium level, you will in fact buy problems, and we have in fact bought problems, he said.
The Fed has cut rates to near zero and bought more than $2 trillion in bonds to boost the economy while Hoenig has persistently advocated tighter financial conditions.
While the outgoing Kansas City Fed chief is not the only dissenter among policymakers, the consensus at the central bank has favored an active effort to buttress weak growth.
The central bank last week launched a portfolio rebalancing plan to buy $400 billion in longer-term bonds while selling a like amount on the short end in an effort to push down longer-term interest rates.
Hoenig will be replaced at the regional Fed bank by Esther George, whose views on monetary policy are not known.
(Reporting by Carey Gillam; Writing by Mark Felsenthal; editing by Jeffrey Benkoe)