N.Y. Fed took steps to shore up dollar

August 06, 1994|By New York Times News Service

NEW YORK -- Monetary authorities in the United States bought a total of $2.81 billion through the sale of German marks and Japanese yen in May and June to support the dollar, the Federal Reserve Bank of New York said yesterday in its regular report on foreign exchange activities.

The New York Fed, which conducts foreign exchange operations on behalf of the Treasury and the Federal Reserve, said it intervened to support the dollar on May 4 and June 24.

Both interventions were confirmed shortly after they began by Treasury Secretary Lloyd M. Bentsen. The New York Fed said that in both instances the intervention was part of a concerted effort among central banks to support the dollar.

During the intervention on May 4, the New York Fed said $1.25 billion was purchased in the open market through the sale of marks and yen. On that date, the Fed and the Treasury's Exchange Stabilization Fund bought $750 million against the mark and $500 million against the yen.

The May 4 intervention came after several weeks of decline by the dollar in what the New York Fed characterized as "increasingly volatile" trading.

In the June 24 intervention, the Federal Reserve and the Exchange Stabilization Fund purchased a total of $1.56 billion, $950 million against the mark and $610 million against the yen.

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