NEW YORK -- U.S. monetary authorities purchased a record $1.56 billion in the concerted effort to prop up the dollar on June 24, the Federal Reserve Bank of New York re ported last week.
The attempt to support the dollar, which involved 16 other central banks, "was widely reported as a failure by people who took at immediate rate reactions." Peter Fisher, senior vice president of the New York Fed and the Federal Open Market Committee's manager for foreign operations, conceded at a press conference.
After the June 24 intervention, the dollar fell to a 13-month low against the German mark and near its modern-day low against the Japanese yen.
In the weeks that followed, the dollar fell several times to post-World War II lows against the yen and plunged to a 20-month low against the mark.
Mr. Fisher acknowledged that part of the reason the intervention did not succeed was that it had been anticipated by the market, which perceived a multitude of factors weighing the currency down.
Chief among 1hem was a "negative" perception that "U.S. authorities do not care about the dollar," he said, referring to the market's view that the United States was willing to use a weak dollar to stimulate exports and reduce the Japanese trade surplus.