The U.S. dollar remains the dominant world currency and U.S. Treasuries remain a sound investment, Federal Reserve Chairman Ben Bernanke said in Atlanta, Georgia on Tuesday.
In a Q&A session after his speech, the text of which was already released early Tuesday morning, Bernanke said he does not see the U.S. dollar's role changing in the foreseeable future.
The comments come after news reports that China is attempting to push wider use of the yuan in global markets. China has signed currency swap contracts with six nations since December 2008.
China has also alluded to worries about the value of U.S. bonds.
Bernanke did address the U.S. deficit problem in his speech on Tuesday, and said the government needs a plan to reduce long-term fiscal imbalances.
For the time being, however, he said they have no choice but to spend.
Bernanke also said he recognizes the Fed's measures to expand its balance sheet need to eventually be unwound, and said it will be a "tough calculation." He emphasized that balance sheet expansion is a "temporary tool," and once the economy is on the road to recovery these emergency measures will not be necessary.
Turning to markets, Bernanke said there has been "considerable improvement" in some markets, but there are still serious issues with confidence levels.