A Reagan administration official reiterated yesterday that the United States has intervened in foreign exchange markets to help stabilize the dollar only on a limited basis and that the administration has not changed its long-held view that intervention cannot alter the economic "fundamentals" of the situation.
This was confirmed by a knowledgeable market source, who said "the United States was supporting the exchange market last week, but the support was mostly spiritual."
Meanwhile, the dollar resumed its advance against most major currencies in quiet trading in Europe yesterday, following agitated trading last week that featured a sizable, coordinated intervention by the big central banks of the Western European countries.
Treasury Secretary James A. Baker III and Federal Reserve Board Chairman Paul A. Volcker had said early last week that market intervention could be more "forceful." Later, it was estimated that the European intervention, coordinated by President Karl Otto Poehl of the West German Bundesbank, threw an estimated $4 billion to $4.5 billion on the foreign exchange markets in an effort to drive the dollar down.
The Federal Reserve Bank of New York, on orders of the Treasury Department, contributed small amounts to the intervention, according to reports by traders.
But an official told The Washington Post in an interview yesterday that the United States had agreed at a January meeting of the "Group of Five" financial ministers to make "only a good-faith effort" when it comes to intervention.
Although some of the European financial ministers left the G-5 meeting with the impression that the United States had made a significant new commitment on intervention, all that was meant was that the United States agreed "it's a good idea to surprise the market every once in a while," this source said.
The administration continues to hold the view that the value of the intervention process is minimal. "With global markets of this size -- maybe with $100 billion or more changing hands every day -- you're not going to be very effective in controlling that with small amounts of intervention," he said.
On the other hand, the official denied another report suggesting that the United States was irked by the heavy intervention last week by the German Bundesbank, because -- according to this report -- such intervention did not deal with underlying problems and, in fact, only promoted volatility. On the contrary, the official said, "So long as the Germans want to do it, it probably makes speculators a little wary."
The dollar yesterday moved up against the British pound, despite the expectation that the end of the coal miners' strike would give sterling a boost. It got one, but it was short-lived: a rise on the opening to $1.0835 from $1.0775 on Friday. Later in the day, the pound had drifted back to $1.0675.
Exchange-market experts noted that there were other depressants for the pound, which touched an all-time low of $1.0360 a week ago.
They said international oil prices, already under pressure, could slide further once Britain's electric power industry cut back massive oil purchases and started buying domestic coal again.
There was no evidence of further intervention by the Bundesbank yesterday, but traders were said to be wary, anticipating that the central bank might come in again at any time. The dollar was quoted in Europe at 3.3740 deutsche marks, up from 3.35 on Friday. The American currency also registered small gains against the French and Swiss francs, but slipped slightly against the Japanese yen.