Fed says last month's 'rate checks' were at Treasury's request
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FILE PHOTO: The exterior of the Federal Reserve Board building is seen in Washington, D.C., U.S., June 14, 2022. REUTERS/Sarah Silbiger/File Photo
Feb 18 (Reuters) - The U.S. central bank on Wednesday confirmed it had asked dealers last month for quotes on dollar/yen rates at the behest of the U.S. Treasury, an unusual move that strengthened the stubbornly weak yen and put investors on alert for the first joint U.S.-Japan currency intervention in 15 years.
"In the days leading up to the meeting, the dollar had depreciated markedly after reports that the Desk had made requests for indicative quotes, known as "rate checks," on the dollar–yen exchange rate," the Fed said in minutes of its January 27-28 meeting published on Wednesday with the usual three-week lag. "The manager noted that the Desk had requested those quotes solely on behalf of the U.S. Treasury in the Federal Reserve Bank of New York's role as the fiscal agent for the U.S."
Reports of the unusual rate check by the New York Fed in late January lifted the yen against the dollar. They were not followed by clear signs of large-scale intervention by either country.
U.S. Treasury Secretary Scott Bessent denied that the U.S. was intervening in currency markets.
(Reporting by Ann Saphir, Editing by Nick Zieminski)
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