Treasury and Federal Reserve foreign exchange operations - dollar values against foreign currencies in fourth quarter 1995

Federal Reserve Bulletin, March, 1996 by Soo J. Shin

TREASURY AND FEDERAL RESERVE FOREIGN EXCHANGE RESERVES

The U.S. monetary authorities did not undertake any intervention operations this quarter. At the end of the quarter, the current values of the German mark and Japanese yen reserve holdings of the Federal Reserve System and the ESF were $20.5 billion and $17.0 billion respectively. The U.S. monetary authorities invest all of their foreign currency balances in a variety of official instruments that yield market-related rates of return and that have a high degree of liquidity and credit quality. A significant portion of these holdings are invested in German and Japanese government-issued securities. As of December 31 the Federal Reserve and the ESF held $7.3 billion and $10.9 billion, respectively, in German and Japanese government securities either directly or under repurchase agreement.(3) In addition, the ESF held $10.5 billion equivalent in nonmarketable Mexican government securities in connection with the medium-term swap arrangement.

(1.) The charts for the report are available on request from Publications Services, Mail Stop 127, Board of Governors of the Federal Reserve System, Washington, DC 20551. (2.) The dollar's movements on a trade-weighted basis in terms of other G-10 currencies are measured using an index developed by staff at the Board of Governors of the Federal Reserve System. (3.) This sentence is corrected and revised from the original text of the "Treasury and Federal Reserve Foreign Exchange Operations" report released February 7, 1996.