No. 2242

NOVEMBER 1, 2001

U.S. MONETARY AUTHORITIES DO NOT INTERVENE IN
FX MARKET DURING THIRD QUARTER

NEW YORK – The U.S. monetary authorities did not intervene in the foreign exchange markets during the July - September quarter, the Federal Reserve Bank of New York said today in its quarterly report to the U.S. Congress.

During the three months that ended September 30, 2001, the dollar depreciated 7.3 percent against the euro and 4.1 percent against the Japanese yen.

Following the September 11 terrorist attacks, the Federal Reserve established 30-day reciprocal swap arrangements with the European Central Bank (ECB) and the Bank of England, and temporarily augmented its existing swap facility with the Bank of Canada. The ECB drew on the swap facility on three occasions. The Bank of Canada and the Bank of England did not draw on their respective swaps during the quarter. As of September 17, the net amount outstanding fell to zero and there was no further swap activity through the end of the quarter.

The report was presented by Dino Kos, executive vice president of the New York Fed and the Federal Open Market Committee’s (FOMC) manager for the system open market account, on behalf of the Treasury and the Federal Reserve System.