No. 2087

May 8, 1996

NO U.S. INTERVENTION IN FOREIGN EXCHANGE MARKETS DURING JANUARY-MARCH 1996 QUARTER

NEW YORK -- The U.S. monetary authorities did not intervene in the foreign exchange markets during the first quarter of 1996, according to a report by the Federal Reserve Bank of New York that was issued to Congress today.

In the January-March 1996 quarter, the dollar appreciated 3.9 percent against the Japanese yen, 3.0 percent against the German mark, and 2.1 percent on a trade-weighted basis against the currencies of the other G-10 nations, the report said.

The report noted that the U.S. authorities received final repayments during the period from Mexico on special short-term swap arrangements. Mexico repaid $650 million to the Treasury's Exchange Stabilization Fund (ESF) and a like amount to the Federal Reserve on January 29, closing out the special short-term swap arrangement that was set up on Feb. 1, 1995. The special swap facility of up to $3 billion established for Mexico by the Federal Reserve expired on Jan. 31, 1996, without being renewed, the report to Congress said.

The report was presented by Peter R. Fisher, executive vice president of the New York Fed and the Federal Open Market Committee's manager for the system open market account, on behalf of the Treasury and the Federal Reserve System.