May 24, 2010 / 4:03 PM / 9 years ago

Timeline: History of central bank intervention

LONDON (Reuters) - The following is a chronology of intervention in foreign exchange markets by major central banks on the dollar, yen, mark and euro.

May 2010 - The Swiss National Bank intervenes in the FX market to weaken the franc as the Swiss currency hits all-time high beyond 1.40 per euro. Traders say it has bought 17 billion euros on May 19. They cite regular SNB activity since April.

April 2010 - The SNB intervenes in the FX market to weaken the franc against the euro. Preliminary government data shows Swiss currency reserves rose 28.7 billion francs ($24.83 billion) to 153.6 billion in April, when the SNB added to its forex war chest to hold the euro around 1.43 francs.

Dec 2009 - Mar 2010 - Traders cited SNB activity on December 21, January 29, February 12, February 23 and March 2 to defend a level of 1.46 per euro.

March 12, 2009 - The SNB intervenes to weaken the franc for the first time since August 1995 after the franc hits all-time low of 1.4576 per euro. Such intervention drove the franc to 1.5450 that month. Quarterly figures indicate the central bank spent some 4 billion euros worth of francs.

June 2007 - New Zealand intervenes for the first time since the NZ dollar was floated in March 1985 after demand for the higher-yielding currency drives it to a 22-year high near $0.7640. a level which the bank said was exceptional and unjustified in terms of the economic fundamentals.

March 2004 - Japan sells 4.7026 trillion yen in currency intervention in March. In Q1, Japan sold 14.8315 trillion yen to stem the yen’s rise, stepping into the market for 47 days between Jan 1 and March 31. March marked the end of Japan’s 15-month campaign to curb the yen’s rise. It spent 35 trillion yen, or more than $300 billion.

Feb 2004 - Japan continues with heavy intervention, spending 3.3420 trillion yen to curb yen rise. The dollar hit a 3-year low of 105.14 yen before staging a 4.5 percent recovery.

Jan 30, 2004 - Japan sells a record 7.1545 trillion yen between Dec 27 and Jan 28. The dollar fell to a 3-year low around 105.45 yen on Jan 27. The Ministry of Finance also sold 5.014 trillion yen of foreign bonds to the Bank of Japan to raise intervention funds through a repo deal under which it would buy the paper back at a later date.

Dec 2003 - Japan sells 2.2519 trillion yen between November 29 and December 26, bringing intervention to record 20 trillion in 2003. The MOF spelled out in its draft 2004/05 budget that it would raise its intervention ceiling to 140 trillion yen from 79 trillion. Until the budget was passed the ministry asked the BOJ to provide short-term funds by buying foreign bonds from its FX account under a repurchase agreement.

Nov 2003 - Japan sells 1.5996 trillion yen between Oct 30 and Nov 26, bringing intervention to around 17.8 trillion yen in the year. In this period the dollar fell to a three-year low of 107.52 yen.

Oct 2003 - Japan sells 2.723 trillion yen between Sept 27 and Oct 29, bringing intervention to a new annual high of 16.2 trillion yen. On Sept 30, the MOF confirmed it sold yen for dollars, acting through the New York Federal Reserve. This broke the MOF’s recent silence on intervention.

Sept 2003 - Japan sells 4.4573 trillion yen, a monthly record, in the currency market in September after refraining from intervening in August. Analysts believe virtually all the intervention was carried out before Sept 20, when the Group of Seven industrial countries issued a statement calling for flexibility in exchange rates.

July 2003 - Japan sells 2.0272 trillion yen in July to prevent the yen from appreciating sharply. The July figure lifts the total yen selling intervention volume to a new annual high of around 9 trillion yen. The previous high was 7.6411 trillion yen hit in 1991.

June 2003 - Japan sells 628.9 billion yen in the currency markets in the May 29-June 26 period to stem the yen’s rise. The figure was substantially less than the previous month.

June 2003 - Japan’s official reserves rise to record levels at the end of May, largely due to the biggest-ever monthly volume of yen-selling intervention — nearly four trillion yen ($34 billion), the Ministry of Finance said.

May 19, 2003 - Dealers in Tokyo say Japanese monetary authorities bought dollars for yen at around 115.10. In European midsession, dollar climbs more than a full yen from 115.25 in a short space of time. Japan declined to comment.

May 15, 2003 - Dealers in London and New York say Japanese monetary authorities sold yen for dollars when the yen rose to a 10-month high of 115.33 in early New York trade. Japanese monetary authorities declined to comment.

May 13, 2003 - Japan is seen selling yen after the dollar falls as low as 116.36 yen in late Tokyo trade. There was no confirmation from the Japanese authorities.

Jan-March, 2003 - Data shows Japanese authorities spent 2.5 trillion yen on currency intervention from January to March.

Feb 28, 2003 - Japan’s Finance Ministry confirms it has conducted solo intervention for a second straight month, buying dollars and euros worth about 513 billion yen. It said it had asked the BOJ to step into the market several times in late February and that euro-buying had been “far less” than dollar-buying versus the yen.

Mid-Jan, 2003 - Japan conducts solo intervention under newly-appointed top financial diplomat Zembei Mizoguchi, spending a little less than 700 billion yen days after the yen rose to a four-month high around 117.40 against the dollar. The MOF confirmed the action later in January.

June 28, 2002 - BOJ intervenes to sell yen, and U.S. Federal Reserve and European Central Bank also sell yen on BOJ’s behalf early in New York trading. ECB confirms it buys euros for yen. Traders see sharp euro move from around 118.10 to highs above 119. Dealers also see Fed buying dollars for yen from around 119, lifting the dollar to highs around 120.35. BOJ data released in July showed Japan spent about 520.5 billion yen to weaken the yen on this day alone.

June 26, 2002 - Bank of Japan intervenes to sell yen, lifting the dollar to 121.35 from around 120.20-30. Second bout takes the dollar to around 121.10 from 120.50/60. Third bout in early European session takes dollar to 120.70 from 120.03. BOJ is estimated to have bought $18.56 billion in its intervention operations in June, including May 31.

June 24, 2002 - BOJ intervenes to sell yen in Tokyo trading, lifting the dollar to around 122.80 from 121.10/15 as the greenback fell to a seven-month low below 121 in the previous session.

June 4, 2002 - BOJ intervenes to sell yen, lifting the dollar a full yen from 123.35 yen.

May 31, 2002 - BOJ intervenes to sell yen for dollars as the dollar falls to around 123 yen, after it dropped to a six-month low below 123 in the previous session. Intervention takes it back to 124.45/50 before another slide to 124 and another round of BOJ yen-selling. Third bout takes it from around 123.75 to above 124.

May 23, 2002 - BOJ intervenes for second straight day, seen selling yen for dollars at 123.90/95.

May 22, 2002 - BOJ intervenes to sell yen for dollars, after the dollar fell to a 5-1/2 month low of 123.50 on doubts about the speed of the U.S. economic recovery. BOJ seen intervening at 123.80/90 yen per dollar.

Sept 24/26/27/28, 2001 - BOJ intervenes to sell yen for dollars, worrying about an export-crippling rise in the value of the yen and following attacks on U.S. cities on September 11. Sept 24/26/27 intervention is not limited to the dollar but includes buying euros for yen, with European Central Bank (ECB) and euro zone central banks operating on behalf of BOJ. On Sept 27 Japan says the New York Federal Reserve intervenes on its behalf for the first time in the September round.

Sept 17, 19, 21, 2001 - BOJ intervenes to sell yen for dollars.

Nov 10, 2000 - ECB in conjunction with national euro zone central banks intervenes to buy euros.

Nov 6, 2000 - ECB and other euro zone national central banks intervene to buy euros.

Nov 3, 2000 - ECB and other euro zone national central banks intervene at least twice to buy euros, following the currency’s 5 percent recovery from record lows set the previous week around $0.8225.

Sept 22, 2000 - Central banks in Europe, Japan and the United States, acting together for first time since 1995, intervene to drive euro higher after currency hits all-time low below 85 cents two days earlier, a loss of nearly 30 percent of its value since its January 1999 launch. Intervention is first by ECB since its birth.

Jan 1999-April 2000 - Japan concerned too-strong yen, trading around 108 to the dollar in January, 1999, will choke off fragile economic recovery and intervenes in FX markets to tame its strength. BOJ sells yen at least 18 times in this period, including once via the Federal Reserve and once via the ECB. Despite intervention, yen continues to strengthen against dollar, reaching 102 by April 2000.

April-Jun 1998 - With yen weakening, BOJ intervenes to support its currency. As yen crumples below 144 to the dollar, U.S. authorities on June 17, 1998 join the BOJ, spending $833 million buying yen.

Apr 1994-Aug 1995 - Dollar sinks to record lows against the German mark, reaching 1.41 in July 1995, and it hits post-World-War Two lows against the yen below 83 to the dollar in April 1995. From April 1994, United States intervenes repeatedly, often in concert with Japanese and individual European central banks, to prop up U.S. currency. The last coordinated intervention with European banks in this period takes place on Aug 15, 1995.

Apr-Aug 1993 - U.S. buys dollars and sells yen.

1991-1992 - U.S. and European central banks intervene repeatedly as U.S. economy tumbles into recession during Gulf War, which weakens the dollar. United States intervenes on both sides of market, spending more than $2.5 billion buying currencies and selling $750 million.

1988-1990 - Dollar trends higher. United States intervenes after Group of Seven statements on importance of maintaining exchange rate stability.

Feb 1987 - Louvre Accord. Weak dollar, growing U.S. trade deficit and prospect of weakening U.S. economy raises concerns in Europe and Japan about further dollar weakening. Group of Five (G5) plus Italy meet at the Louvre in Paris and issue statement agreeing to “foster stability of exchange rates around current levels.” United States, frequently in coordinated operations, intervenes a number of times to buy dollars.

Sept 1985 - Plaza Accord. G5 - U.S., Germany, Japan, Britain, France - meet at Plaza Hotel in New York to discuss concerns about very strong dollar and U.S. worries about declining competitiveness. Following weeks see substantial intervention sales of dollars for other G5 currencies by U.S. and other monetary authorities.

1980-1981 - U.S. authorities intervene to tame strengthened dollar.

1978-1979 - Dollar comes under heavy pressure amid high oil prices, high U.S. inflation and deteriorating balance of payments. In November 1978 a major new dollar support program is introduced to raise a large war chest of up to $30 billion. U.S. intervenes forcefully and often in the market with other central banks.

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