It was entirely reasonable – if somewhat risky – for US Federal Reserve chairman Ben Bernanke to imply in a speech that he does not want the dollar to weaken further. A falling currency increases inflation, all central banks worry about it and it is fine for the Fed to worry in public. Mr Bernanke’s remarks clarify the Fed’s thinking, even though they may do little to reduce the risk of dollar-driven inflation.

The exchange rate as such is no business of central banks: indeed, targeting an exchange rate usually means losing control over interest rates. But because a falling currency raises import prices, inflation, and maybe consumer expectations of future inflation, central banks must follow it closely.