No. 2125

OCTOBER 31, 1996

U.S. MONETARY AUTHORITIES DO NOT INTERVENE DURING JULY-SEPTEMBER QUARTER

NEW YORK -- The U.S. monetary authorities did not intervene in the foreign exchange markets during the third quarter of 1996, a period of relative stability for the major currencies, the Federal Reserve Bank of New York reported to Congress today.

During the three months that ended September 30, the dollar appreciated 1.6 percent against the Japanese yen, 0.1 percent against the German mark and 0.1 percent on a trade-weighted basis against other G-10 nations' currencies.

The New York Federal Reserve's report noted that there were a few brief episodes of sharp dollar movements despite the period's general stability. The dollar's largest one-day move was on July 16, when the dollar traded in a 3.1 percent range against the mark, the report said.

"As with other sharp dollar moves over the period, the dollar's trading ranges over subsequent days fell back towards the period's average," the report stated.

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