SELfCTED INTERESTS" EXCHANGE RATES FOR MAJOR COUNTRIES & THE US.

May 26, 1971 No. 507. ^ H-13 Division of International Finance Europe and British Commonwealth Section 7 -.. SELfCTED INTERESTS" EXCHANGE RATES FOR MAJOR COUNTRIES & THE US. WEEKLY SERIES OF CHARTS BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

TABLE OF CONTENTS PART I. EXCHANGE RATES AND GOLD PRICES Chart 1A and B - Spot Exchange Rates, Major Currencies against U.S. Dollar Chart 2A and B - 3-Month Forward Exchange Rates, Major Currencies against U.S. Dollar Chart 3A and B - 3-Month Forward Exchange Rates, Major Currencies against U.K. Pound Chart 4 - Gold Price In London PART II. SHORT-TERM INTEREST RATES Chart 5 - Call Money Rates Chart 6A and B - London: Euro-* Deposit Rates Chart 7A and B - New York - London: Yields on U.S. Dollar Funds Chart 8A and B - London: Covered Yields on U.S. Dollar Funds Chart 9A and B - Interest Arbitrage: United States-United Kingdom Chart 10A and B - Interest Arbitrage: U.S.-Gemtany and U.S.-Swltzerland Chart 11 - Interest Arbitrage: United States-Canada Chart 12 A and B - Selected Short-term Interest Rates PART III. LONG-TERM INTEREST RATES AND STOCK INDICES Chart 13 Chart 14 - Long-Term Bond Yields - Industrial Stock Indices PART IV. SELECTED CENTRAL BANK DISCOUNT RATES AND LATEST FIGURES PLOTTED ON THE CHARTS NOTE: This series is a continuation of the CAPITAL MARKETS DEVELOPMENTS ABROAD, which has been published under that title through December 31, 1968. The changes in the format and order of the charts are fully explained in the Supplement to the series, which accompanied issue dated January 1, 1969.

- 7 Chart 1A SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U.S. DOLLAR Weekly averages Per cent Above pai SWISS FRANC 1.6 GERMAN MARK U.K. POUND Par U.S. Below par Above par JAPAI INESE YEN FRENCH FRANC- with U.S. DUTCH GUILDER Below par S D S D M J S D M J M J M J S D * Devaluation of the French franc from 4.94 to 5.55 for $1.00. ** Rate not supported by Central Bank. * * * Revaluation of the DM from 25.00 to 27.32 in U.S. cents. * * * * May 10, 1971 - Swiss franc revalued; new par 24.485 U.S. cents.

\! Chart IB SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U.S. DOLLAR Weekly averages Percent Above par 1.2 CANADIAN DOLLAR BELGIAN FRANC n ITALIAN LIRA 1.2 Below par J D J J D M S M S D M S M J S 0 * Can. $ rate not supported by Bank of Canada.

% Chart 2A 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U.S. DOLLAR Weekly averages PREA 1 <IUM + Per cent per annum 16 12 vx < M v/ A / A, r 7 v\ A V iermz IN MAI RK 1 z I / A V V V 1 1 & K ASV fiss Fl RANG \ Aj.k. POUNI ) V h i f I! 12 disco UNT- 1 1 i i 1 1 1 i i 1 1 1 1 M J S D M J S D M J S D M J 16 * No quotation.

Chart 2B 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U.S. DOLLAR Weekly averages Per cent per annum PREMIUMS- DUTCH GUILDER CANADIAN DOLLAR FRENCH FRANC 20 24 28 DISCOUNT - 32 M J S D M J S D M J S D J S D # Devaluation of the French franc from 4.94 to 5.55 for $1.00. ** Can. $ rate not supported by Bank of Canada. *** No quotation

Chart 3A 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U.K. POUND Friday figures PREMIUM Per cent per annum 24 20 GERMAN MARK U.S. DOLLAR DISCOUNT S M D M S J D J S D M J S D *No quotation.

Chart 38 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U.K. POUND Friday figures Per cent per annum PREMIUM* SWISS FRANC FRENCH FRANC DISCOUNT M J s D M J S D M J S D M J S D * Devaluation of the French franc from 4.94 to 5.55 for $1:00

Chart 4 GOLD PRICE IN LONDON, 12.5 Kg BARS Week's average of afternoon fixings U.S. dollar equivalent per fine ounce 44 42 40 34 M J S D M J S D M J S D M J s D MARKET SUPPORTED BY GOLD POOL U.S. dollar equivalent per fine ounce 35.3 35.2 35.1 35.0 * Market closed March 15-April 1, 1968 Digitized for FRASER I

CHART5A CALL MONEY RATES DOLLAR FUNDS Weekly averages OVERNIGHT EURO-DOLLAR DEPOSITS FEDERAL FUNDS EURO-CURRENCIES Weekly averages Per cent per annum r 12 EURO-SWISS FRANC j 0 M J S D M J S 1968 1969 1971 * May 10, 1971 - Changed to Overnight Euro $ Deposits Digitized for FRASER

Chart 5B CALL MONEY RATES FOREIGN CURRENCIES* Friday figures Per cent per annum ARAN JU.K. CANADA SELECTED EEC CURRENCIES** * Friday figures Per cent per annum FRANCE GERMANY NETHERLANDS D S D M S M J J S D J S J D * Japan, Unconditional Money; U.K., 2-day Local Authority Deposits; Canada, Day-to day Loans, weekly average. ** Germany, Call Money; France, Day-to-day Money;Netherlands, Call Money, weekly average.

Chart 6A LONDON: EURO-DOLLAR DEPOSIT RATES Friday figures Per cent per annurr 10 CALL OVERNIGHT 1968 1969 * May 12/71-changed to Overnight Euro-Dollar Deposits

LONDON: EURO DOLLAR DEPOSIT RATES Friday figures! i! 1 1 Per cent per annum 1 V! i A I ^ /I r i \ ' : V 1 i J I f \ I : / j : i I 1 i i ; 1 i i 1,A6 MONTH f t!! y \\ 1!!... i i i 3-MONTH VI n!! i I!!! i'. 1 rtrr I i ^ w\ VI i '! Ul i 1 1 1 I 12 10 I 1 1 1 I 1 1 I i i 1 i i i i! i I i II! 1 1 M i l l i i i i... i l l! 1 1 M J S D M D M S D M J D J S J S

NEW YORK-LONDON: YIELDS ON U.S. DOLLAR FUNDS 3 MONTH DOLLAR DEPOSIT RATES-SECONDARY MARKET Wednesday figures Per cei EURO-DOLLAR DEPOSIT U.S. CERTIFICATE OF DEPOSIT EURO-DOLLAR OVER U.S. CERTIFICATE OF DEPOSIT M S S D D

Chart 7B NEW YORK-LONDON: COSTS OF U.S. DOLLAR FUNDS 3-MONTH DOLLAR DEPOSIT RATES-PRIMARY MARKET Wednesday figures Per cent per EURO-DOLLAR DEPOSIT ADJUSTED -1 EURO-DOLLAR DEPOSIT U.S. CERTIFICATE OF DEPOSIT ADJUSTED 1 1 EURO-DOLLAR OVER U.S. CERTIFICATE OF DEPOSIT S D s J S D D * Adjusted for Reserve Requirement ** Adjusted for 10% Marginal Reserve Requirement ***Ad usted for 20% Marginal Reserve Requirement

-Chart 8A\ LONDbN: COVERED YIELDS ON U.S. DOLLAR FUNDS HIRE PURCHASE AND EURO-DOLLAR RATES Friday figures Per cent per annum EURO DOLLAR DEPOSIT q l Y / v ^ HIRE PURCHASE COVERED FAVOR HIRE PURCHASE DIFFERENTIAL! FAVOR EURO-DOLLAR M S D M S M S D M S J D J J D

Chart 88 LONDON: COVERED YIELDS ON U.S. DOLLAR FUNDS LOCAL AUTHORITY AND EURO-DOLLAR RATES Friday figures Per cent 14 EURO DOLLAR DEPOSIT 12 10 8 LOCAL AUTHORITY DEPOSIT I I 'i COVERED j 6 4 2 0 T T FAVOR LOCAL AUTHORITY 0 2 4 6 8 DIFFERENTIAL FAVOR EURO DOLLAR J S D J S D S M J S D

INTEREST ARBITRAGE: UNITED STATES AND UNITED KINGDOM i f! ; i r ~ j 3-MONTH TREASURY BILL RATES Per cent per annum r n : 12 ' U.K. LOCAL AUTHORITY DEPOSITS* UNCOVERED I NEW YORK Plotted for comparison purposes

INTEREST ARBITRAGE: UNITED STATES AND UNITED KINGDOM Friday figures Per cent per annum RATE DIFFERENTIAL AND 3-MONTH FORWARD STERLING SPREAD IN FAVOR OF LONDON DISCOUNT FORWARD RATE IN FAVOR OF LONDON 2 RATE DIFFERENTIAL WITH FORWARD EXCHANGE COVER (NET INCENTIVE) s D J s D J s D J S D

j /- r Chart 10A 3-MONTH FUNDS INTEREST ARBITRAGE: EURO DOLLAR - GERMAN MARK FRANKFURT INTERBANK LOAN RATE VS. LONDON EURO-DOLLAR RATE Wednesday rates Per cent per annum IN TERMS OF DM GERMAN INTERBANK LOAN RATE EURO-DOLLAR COVERED DIFFERENTIAL vra U \A., V 1! I 1 1 i! 1 i! I 1 \i i i 1 i : ; : i! i V, 1 FAVOR FRANKFURT A "! FAVOR EURO DOLLAR! M J S D M J S D M J S D M J S D i I

4'; Chart 10B 3-MONTH FUNDS INTEREST ARBITRAGE: EURO-DOLLAR - SWISS FRANC ZURICH DEPOSIT RATE VS. LONDON EURO DOLLAR RATE Wednesday rates Per cent per annum IN TERMS OF SWISS FRANCS ; EURO-DOLLAR SWISS DEPOSIT RATE DIFFERENTIAL FAVOR ZURICH 2, FAVOR EURO DOLLAR M S D S D S D J S D

f Chart 1 1 3-MONTH INTEREST ARBITRAGE: UNITED STATES - CANADA Friday figures Per cent per annum I BILL RATES CAN. FIN. CO. PAPER UNITED STATES TREASURY BILLS CANADIAN ^ TREASURY BILLS BILL RATE DIFFERENTIAL AND FORWARD CANADIAN DOLLAR AV 1 FORWARD RATE /'v GROSS SPREAD IN FAVOR OF CANADA COVERED RATE DIFFERENTIALS TREASURY BILLS PRIME FINANCE PAPER FAVOR U S M S D S D S s

Chart 12A SELECTED SHORT-TERM INTEREST RATES* Per cent per annum ir GERMANY U.K. U.S. 9 JAPAN U.S. CANADA 1967 1968 1969 1970 1971 *3 month treasury bill rates for all countries except JapanfAverage rate on bank loans and discounts) and Germany(lnterbank Loan Rate)

Chart 12B SELECTED SHORT-TERM INTEREST RATES * EURO-DOLLAR - LONDON U.S. SWITZERLAND 1967 1969 1971 * 3 month treasury bill rate for US, Switzerland-3 month deposit rate ** 3 month rate for U.S. dollar deposits in London.

1 LONG-TERM BOND YIELDS Weekly figures Per cent per annum NETHERLANDS j CANADA. U.S. SWITZERLAND 11 U.K. EURO DOLLAR BONDS GERMANY Monthly figures 10 U.S. CORP. DOLLAR EURO BONDS U.S. CORP. Aaa BONDS U.S. CORP. DM EURO-BONDS 1967 * New series for Switzerland starts 8-2 68, U.S. Corp. Dollar Euro-Bonds and U.S. Corp. DM Euro- Bonds starts 12 70, Euro-Dollar Bonds starts 4-2-71 ** New-Average yield of all German P A. Bonds begins 9-4-70.

CHART 14 INDUSTRIAL STOCK INDICES 320 J 280.U.K. i 200 SWITZERLAND 400 H 320 GERMANY 240 U.S. 160 - ^JAPAN - - - 1 I 1 1 1 1 1! 1 I 1 II 1 1 I I II 1 1 1 1 1 1 II 1 II 1 II ii 1 i i 1 ii 1 i i * Japan index of 225 industrial and other stocks traded on the Tokyo exchange. ** Japan index of all industrial and other stocks traded on the first section of the Tokyo Stock Exchange.

H. 13 No. 507 IV. SELECTED CENTRAL BANK DISCOUNT RATES Country Current Rate In Effect Since Previous Rate In Effect Since E.E.C.: Belgium 6.0 Mar. 25, 1971 6.5 Dcc. 10, 1970 France 6. 75 May 13, 1971,6.5 Jan. 8, 1971 Germany 5.0 Apr. 1, 1971 6.0 Dec. 3, 1970 Italy 5.0 Apr. 5, 1971 5. 5 Mar. 9, 1970 Netherlands 5.5 Apr. 5, 19 71 6.0 Aug. 4, 1969 Switzerland 3.75 St-pt.15, 1969 3.0 July 10, 1967 United Kingdom 6.0 Apr. 1, 1971 7.0 Apr. 15, 19 70 Canada 5. 25 Feb. 24, 1971 5. 75 Feb. 15, 1971 Japan 5.5 Hoy 8, 1971 5. 75 Jan. 20, 1971 United States U. 75 Fob. jj, 1971 5.0 Jan. 19, 1971

r 4 iv-2 LATEST FIGURES PLOTTED ON THE CHARTS Chart Panel Series Date Rate 1A Upper Swiss franc May 21-0.023! German mark -- --! U.K. pound May 21 + 0.80] j Lower Dutch guilder IB French franc May 21 4-0.371 i Japanese yen " 4-0.721 j Belgian franc May 21 + 0. 746 Italian lire " + 0.373 Canadian dollar -- 2A German mark May 21 + 1.46 Swiss franc " + 3.08 U.K. pound " - 1.09 2 6 Dutch guilder M + 2.26 Canadian dollar " + 1.24 French franc " 4-0.18 3A German mark May 21 + 2.24 U.S. dollar " + 0.98 3B Swiss franc " + 3.27 French franc " + 1.37 4 Gold price, U.S. dollar per ounce May 21 41.06 5A Upper Overnight Eurc-$ deposits- 5B May 12 19 8. 15 4.55 Federal Funds May i-.vi Middle Differential May + die" Lower Euro-currencies: Euro S May 2] 6.50 Upper Lower Euro DM " 0.81 Euro Swiss Fr. " 0. 75 Japan, Unconditional Money " 6.50 U.K., 2-day Local Author. Deps. " 6.50 Canada, Day-to-day Loans May 5 3.30 France, Day-to-Day Money " 14 5. 75 Germany, Call Money " 21 0.50 Netherlands, Call Money " 7 4.00 * May 12/71 -- changed to Overnight Euro-$ Deposits

IV-3 Chart Panel Series Date Rate OA Euro-$ Overnight Rate * May 7 li l:i 2.88 Euro-$ 1-month Rate May 21 6.25 6B Euro-$ 3-month Rate " 6.81 Euro-$ 6-month Rate 7. 06 7A Upper Euro-$ 3-month Deposits May 19 7.06 U.S. Certificate of Deposits " 5.02 Lower Differential " + 2.04 76 Upper Curo-S 3-month Deposits 7.06 Euro-S 3-month Deposits (Adj.) 8.82 U.S. Certificate of Deposits (Adj.) 5.26 Lower Differential: on Adj. Euro-$ Deposits " + 3.56 on Unadj. Euro-$ Deposits + 1.80 8A Upper Luv. PI Euro-S 3-month Deposits May 7 7.22 Hire Purchase Deposits (covered) 5.34 Differential " -1.88 CB 'Jppei l : uiu-$ 3-mc till Deposits 7.22 Local Authority Deposits (covered) " 5. 16 Lower Differential " - 2.06 9A U.S. Treasury Bill rate May 21 4.28 U.K. Treasury Bill rate " 5.52 Local Authority Deposit (uncovered) " 6. 56 VB Upper Spread (+= favor London) + 1. 24 3 month Forward Pound " - 1.17 Lower Net Incentive (+- favor London) " + 0.07 * May 7/21 -- Changed to Overnight Euro-$

IV-4 Chart Panel Series Date Rate 10A Upper Euro-$ Deposits (covered) May 19 4.87 German Interbank Loan rate 6. 12 Lower Differential + 1.25 10B Upper Euro-S Deposits (covered) 4.03 Swiss Deposit rate 3.50 Lower Differential - 0.53 11 Upper Canadian Finance Paper " 21 3.88 U.S. Treasury Bill rate " " 4.28 Canadian Treasury Bill rate " " 2.89 U.S. Prime Finance paper (not plotted) May 21 4.88 Second Bill rate differential - 1.39 Forward Canadian dollar " + 1.21 Third Net incentive on bills " - 0. 18 Bottom Net incentive on Finance Paper + 0.21 12A Upper U.K. Treasury Bill rate May 21 5. 52 U.S. Treasury Bill rate " 4.28 German Interbank Loan rate " 6. 12 Lower Japanese Average rate March 7. 663 Canadian Treasury Bill rate May 21 2.89 U.S. Treasury Bill rate " 4.28 126 Euro-$ Deposits " 7.06 Swiss 3-month Deposit rate " 3. 50 U.S. Treasury Bill rate " 4. 28

IV- 5 Chart Panel Series Date Rate 13 Upper Netherlands May 7 7.12 Canada " 5 6.62 United States " 19 6.12 Switzerland " 13 5.34 Middle * Germany " 7 7.99' United Kingdom " 14 9.24 *** Euro-dollar bonds " 14 " 21 7.65 7.71 Lower U.S. Corp. Dollar Euro-bonds March 8.03 U.S. Corp. DM Euro-bonds " 7.31 U.S. Corp. Aaa bonds April 7.25 14 Upper Switzerland May 21 386. 70 Germany " 14 271.40 United States " 21 226.90 Middle United Kingdom " 21 220.92 Canada " 13 219.46 Lower ** Japan " 21 412.08 1 United States " 21 226.90 * New - Average yield of ALL German Public Authorities bonds made as of banking key days. ** Beginning week ended September 5, 1970, the Japanese index plotted is that of all industrial and other stocks on the First Section of the Tokyo Stock Exchange. *** New series -- April 2/71