ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by N RamachandraSubscribe to N Ramachandra

WORLD MONEY-US Economic Downswing Helps Dollar

 WORLD MONEY US Economic Downswing Helps Dollar N Ramachandra DURING the early part of 1979 the US balance of payments showed a significant turn round. The exchange markets strengthened in favour of the US dollar and, as a result, the US was able to pay off all outstanding swap debts to foreign central banks. The US had bought the equivalent of $ 2.2 billion in foreign currencies on the New York market and of about $ 5 billion in foreign currencies from correspondents, mainly from Deutsche Bundesbank and the Swiss National Bank. The repayments by the Federal Reserve to the Deutsche Bundesbank were equal to $ 4.4 billion in respect its DM debt and to Swiss National Bank equal to $ 487 million in respect of its Swiss Franc debt. The Treasury's Exchange Stabilisation Fund (ESF) also repaid the equivalent of $ 613 million to the Deutsche Bundesbank and of $ 613 million to the Swiss National Bank. After repayment of all these swap debts, incurred mainly after 1971, the Federal Reserve and ESF were able to add $ LI billion equivalent to the foreign currency balances, which totalled $ 6.3 billion equivalent as on April 30.
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