U.S. President Barack Obama will reappoint Ben Bernanke for a second term as chairman of the Federal Reserve on Tuesday, a senior administration official said on Monday.

Bernanke, whose four-year term as head of the U.S. central bank ends on January 31, 2010, will also be praised by Obama for his handling of the financial crisis, the official said.

Financial markets have given Bernanke high marks on the job and his reappointment was widely forecast, although a White House announcement was not expected until later this year.

Bernanke, 55, was appointed by President George W. Bush to succeed Alan Greenspan and is a widely respected monetary scholar who has long called for a more open central bank.

In remarks prepared for delivery at an event in Massachusetts, where Obama is on vacation, the president will also say the U.S. auto industry is showing signs of life and the U.S. credit and housing markets have been saved from collapse, the official said.

The man next to me, Ben Bernanke, has led the Fed through one of the worst financial crises that this nation and this world have ever faced, Obama will say in a statement to the media at 9 a.m. EDT (1300 GMT).

Bernanke has led the Fed and the U.S. economy during its most tumultuous period since the Great Depression of the 1930s. The announcement on Tuesday will end any lingering worries about who might head the central bank as the economy recovers.

Bernanke has mapped out his strategy to pull back the U.S. economy from exceptionally low interest rates and extricate the Fed from a flood of loans to financial markets without sparking unwanted inflation.

(Editing by John O'Callaghan)