The U.S. dollar fell in nervous trading late yesterday after a high German central bank official said that last year's multination intervention to support the dollar had totaled $50 billion.
Darl Otto Poehl, vice president of the German Bundesbank, cited that figure in a Berlin speech, touching off concern among traders that much of the $30 billion mobilized by the United States last Nov. 1 as parr of a "dollar rescue" program might already have been used up.
This was flatly denied yesterday by a high Treasury official. "We've used only a minority of our resources," he said, "and we've got plenty of ammunition left to defend the dollar. There need be no fear that we've run out of the capacity and will to carry out the policy announced on November 1."
Private money market economists here and in New York said that they were "surprised" that the markets were surprised by Poehl's $50 billion figure, which represents the gross amount, not the net amount of intervention.
Two highly regarded experts separately estimated that the U.S. might have spent only $5 billion to $6 billion out of the $30 billion it had promised to mobilize on Nov. 1. Even when and if it spends all of the marks and Swiss francs acquired in two socalled "Carter bond" issues in those countries, the total drain on the $30 billion would be well under $10 billion, New York expert Hnry Kaufman said.
The price of gold in London moved up $4.75 from the Monday close to $22.375, while the British pound rose to $2.0025 from $1.9930. The dollar closed at 1.8515 marks in Frankfurt, down from 1.8595; and at 1.68175 Swiss francs in Zurich, down from 1.70125.
The Tokyo markets were closed for a national holiday, but the Japanese yen in New York closed at 197.15, compared to the Friday close of 198.
Market commentary attributed the dollar weakness to other factors as well as the Poehl speech, including continuing uncertainty over the future of Iran, and rumors that U.S. money supply figures to be released Thursday would show a big jump.
Poehl indicated that of the $50 billion intervention total, the German central bank's share had amounted to $24 billion, with purchases by the Federal Reserve, and the central banks of Japan and Switzerland accounting for the rest.
In addition, Poehl said that German intervention in the joint European float, known as the "snake," had amounted to another $8 billion, and the total of $32 billion worth of intervention had expanded the German money supply by 11.5 percent, or well above the announced 8 percent target.
Under the Nov. 1 agreement, the "swap" lines between the U.S. and the other central banks were extended, and each of the other three countries agreed to intervene in their own markets to protect the dollar. Thus, the $30 billion figure represents only the mount of resources mobilized by the United States, to which additional unlimited amounts have been pledged by the other governments.
House Banking Committee Chairman Hnry S. Reuss (D-Wis.) said in a telephone interview that although he did not know out of his own knowledge how much had been committed by the U.S. in its intervention operations, he "would not be surprised if more than half of the $30 billion has been used."
Reuss has been pressing Treasury Secretary W. Michael Blumenthal to borrow dollars from commercial banks in the Euro-dollar markets, as one way to take selling pressure off the American currency. Blumenthal has rejected the proposal as not desirable or effective.