icted INTEREST & EXCHANGE RATES FOR MAJOR COUNTRIES & THE US.

February 23, 1972 No. 546 H-13 Dtvisiw ef ktemetlwd Fiwce Ew##e mi Brillsli f HHII SecHw icted INTEREST & EXCHANGE RATES FOR MAJOR COUNTRIES & THE US. WEEKLY SERIES OF CHARTS MM 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.-Germany and U.S-Switzerland Chart 11 - Interest Arbitrage: United States-Canada Chart 12A 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 was published under that title through December 31,1968. The changes in the format and order of the charts are explained in the Supplement to the series, which accompanied issue dated January 1,1969. All series and their sources are fully described in a Supplement dated January 1, 1972.

Chart 1A SPOT EXCHANGE RATI S - MAJOR CURRENCIES AGAINST U S. DOLLAR Weekly averages Per cent Above GERMAN MARK U.K. POUND against SWISS FRANC DUTCH GUILDER JAPANESE YEN FRENCH FRANC against U.S. J D 1972 1973 s o

SPOT EXCHANGE RATE - MAJOR CURRENCIES AGAINST U S. DOLLAR Weekly averages 1 2 / BELGIAN FRANC u s f ITALIAN LIRA J I I I I I I I J I L I I I I I I I I I J s J s 1972 1973 Ratio scale. U S cents 102 / A.J CANADIAN DOLLAR ^ v > r/' W i i 100 98 V t 94 i i 1 i I 1 1 1 1 1 1 i i i i i i I i i i i! i i i i i i I i ; i i i J s D M J S D 1970 1971 1972 92

SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U S. DOLLAR 11. 1971 - Weekly averages Par cent Above par GERMANY NETHERLANDS JAPAN FRANCE U.S. dollar Bekm JUNE JULY AUG 1971 SEPT. OCT. NOV. DEC. Financial franc

zp Owl ID SPOT EXCHANGE RATES - MAJOR CURRENCIES AGAINST U S. DOLLAR 11. 1971- Above p«r UK. swnx ITALY U.S. MAY june JULY AUG. SEPT. OCT. NOV DEC 1971

3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U S. DOLLAR Weekly averages PREMIUM GERMAN MARK SWISS FRANC U.K. POUND DISCOUNT * No quotation 1968 1969 1970 1971 4-MONTH FORWARD YEN AGAINST U.S. DOLLAR Weekly averages cent per annum JAPANESE YEN PREMIUM M J S D M J S D

CMS 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES Pet cent pec j\ DUTCH GUILDER CANADIAN \ A KH1AR»A j, 1 /I /FREHCH FRANC DISCOUNT - «' J s D M J s 0 M J S D M J S 0 1969 1999 1970 1971 OwwlMtiwi ef me French frewc frew 4.S4 $S fcr $1.00. M Cw l f«t» w< imppirtk l-t ( CIIIII *** No quotation

Chart 3A 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U.K. POUND Friday figures PREMIUM Per ceat per annum 24 20 GERMAN MARK U S. DOLLAR * No quotation s D M J S D M J S D M J S D 1968 1969 1970 1971

CM at 3-MONTH FORWARD EXCHANGE - MAJOR CURRENCIES AGAINST U K POUND Fiiiay figures Per cent per annum SWISS FRANC FRENCH FRANC m r 7 M J $ 0 J $ 0 M J s D «J S 0 IMS IKS 1970 ISii Oewtwtsen e«mm Frew*fcwwI m 4*4to S.SStor $1.00

1* Chart 4 GOLD PRICE IN LOUDON, 12.5 Kg BARS Week's average of afternoon fixings U.S. dollar equivalent per fine ounce 50 46 42 38 D S 0 M J S M S D D 1969 1970 1971 1972 34

CHART 5A CALL MONEY RATES DOLLAR FUNDS Weekly averages EURO-DOLLAR DEPOSITS CALL OVERNIGHT 4 FEDERAL FUNDS - J vyw/ 1 VVN EURC 1-DOLLAR OVER FEDERAL FUNDS 1 W 1/v v* 1 J w J \ : - i i 1 i i 1 M 1 i i EURO-CURRENCIES Weekly averages i i 1 i i 1 i i 1 i i 1 1 1 1 1 1 1 1 1,, II I.I 1 1 1 1 1 Per cent per annum EURODM EURO-SWISS FRANC M J S D M J s D M S D S D 1969 1970 1971 1972 * May 10. 1971 - Changed to Overnight Euro $ Deposits.

CALL MONEY RATES SELECTED FOREIGN AND EEC CURRENCIES Friday figures Per cent per an 12 8 4 NETHERLANDS i i 1 i i I i i 1 i I 1 i I 1 l I 1 I l I I 0 8 4 I l I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1 I I 1 I I 0 12 8 4 0 nee, Day-to-day Money; Netherlands, Call Money, weekly average. Japan, Unconditional Money; iada, Day to day Loans, weekly average; Germany, Call Money; U K., 2-day Local Authority Deposits.

IV LONDON: EURO-DOLLAR DEPOSIT RATES Friday figures i Per cent per annum J S D 1970 J S D M J S O 1971 1972 r 12/71-changed to Overnight Euro-Mar Deposits «ty 1 changed to 7-Oey Euro-Dollar

Chart 66 LONDON: EURO DOLLAR DEPOSIT RATES Friday figures f»r ceet p* \ J U 6-Morm h ihi 1 l/v \f\ t 1 1 1 1 1 1 1 l 1 I 1 l 1 l 1 I l 1 l II l 1 1 1 1 1 1111111 1 1 1 1 1 1 1 M J S O M J S O M J S O M J S D 1969 1970 1971 1972

Chart 7A 2?^ NEW YORK-LONDON: YIELDS ON US. DOLLAR FUNDS 3-MONTH DOUAR DEPOSIT RATES SECONDARY^MARKET Wednesday figures " Per cent pet «nnum 71 U S CERTIFICATE OF DEPOSIT I i i I i i I i i 1 i i I i i 1 i i 1 i i I i i 1 ii 1 i i I i i I i i I i i I i i I i i 1 DIFFERENTIAL FAVOR EURO-DOLLAR ' Mxi A A r i Wvx/l A I v V El IRO-OOUAR OVER U.S. G ERTIFICATE OF DEPOSIT l I 1 I l 1 1 l 1 l l l I 1 I I 1 I l 1 l l i i I i i 1 i i 1 i i 1 1 1 1 1 I 1 I, i M J S 0 M J D M J S I * J S D 1969 1970 1971 1972 - \ 1

f \ Chart 76 NEW YORK-LONDON COST OF U.S. DOLLAR FUNDS 3 MONTH DOLLAR DFPnsir pairs -PRIMARY MARKET Wednesday figures Per cent per annum /^EURO-DOLLAR DEPOSIT ADJUSTED EURO DOLLAR DEPOSIT US. CE i 1 J i i I i i I i i I i i I i i 1 i i RTIFICATE OF DEPOSIT ADJUSTED I A 1 - V i/yv 4fk / 1/ 11 * *11 / /!\7\VL h EURO-DOLLAR OVER V \ J \ v U S. CERTIFICATE OF DEPOSIT \ n ADJUSTED* 1 V,, (, 1!, I 1 I I 1 1 I 1 1 1! 1 1.1 _L_L 1 1 1 1 1 1 1 1 1 1 L 1 1 1 1 1 1.1 1J l_j_. M J S D H J S D M J S D M J S D 1969 1970 1971 1972 Adjusted for Reserve Requirement ** Adiusted-for 10% Marginal Reserve Requirement Adjusted for 20% Margma. kt-erve Requirement

Chart 8A. 2 >< LONDON: COVERED YIELDS ON U S. QOLLAR FUNDS HIRE PURCHASE AND EURO-DOLLAR RATES Friday figures ctf re*! ' ' 12 \ EURODOLLAR DCPOSI r : i / /\A/lI w * y i HIRE PURCHASE COVERED 1 - - m I I 1 1 1 1 1 1 1 I I 1 1 1 I I 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 i 1 1 I,\ i/l A / v y Ka/^1 V i FAVOR HIRE PURCHASE - - DIFFER 1111 1111 M 1 1 1 1 1 1 1 M II 1 1 1 1 1 I i 1 1 1 M. FAVOR EURO DOLLAR i 1 1 I 1 I 1 M M J S D M J S D M J d D M J S D 1969 1970 1971 1,72

I: COVERED YIFI DS ON U.S. DOLLAR FUNDS 12 9 6 LOCAL AUTHORITY DEPOSIT 3 + 0 I I i II 1 I 1 1 I 1 1 I I I 1 I 1 11 1 I I 1 I 1 I II I I I 1 I I I II 1 II 1 I I I I I FAVOR LOCAL AUTHORITY + 0 3 6 FAVOR EURO DOLLAR 9 1969 1970 1971 1972

Chart W ** P? MTEREST ARBITRAGE: UNITED STATES AND UNITED KINGDOM Fridey figures Per cent per annum 3-MONTH TREASURY BILL RATES U.K. LOCAL AUTHORITY DEPOSITS UNCOVERED LONDON NEW YORK M J s D y J s D M J s 0 M J S 0 1969 1970 1971 1972 * Plotted for comparison purposes Digitized for FRASER "1

2\t> Chart 9B INTEREST ARBITRAGE UNITED STATES AND UNITED KINGDOM Friday figures Per cent per annum RATE DIFFERENTIAL AND 3 MONTH FORWARD STERLING PREMIUM] SPREAD IN FAVOR OF LONDON FORWARD RATE DIFFERENTIAL FAVOR LONDON 4 M J s D M S D M J S 0 1969 1970 1971 1972 Digitized for FRASER Federal i Reserve Bank of St. Louis

01 CMIM M0ONTH 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 LOAN NATE EURO-DOLLAR COVERED DIFFERENTIAL FAVOR FRANKFURT FAVOR EURO-OOUAR S D If J S D If J S 0 m J s 0 1969 1970 1971 1972 No quotation

Chart 108 3-MONTH FUNDS INTEREST ARBITRAGE: EURO DOLLAR - SWISS FRANC ZURICH DEPOSIT RATE VS. LONDON EURO DOLLAR RATE Wednesday rates Per cent IN TERMS OF SWISS FRANCS 14 12 10 EURODOLLAR COVERED * ; 6 4 9 SWISS DEPOSIT RATE 2 DIFFERENTIAL FAVOR ZURICH 0. 2! f 0 2 4 i FAVOR EURO DOLLAR S M J S 0 M J S 0 1969 1970 1971 1972 S 1 No quotation

3-MONTH INTERES1 ARBITRAGE: UNITED STATES - CANADA Friday figures bill rates I I I I I I II BILLS bill rate differential and forward canadian dollar FORWARD RATE GROSS SPREAD IN FAVOR OF CANADA covered rate differentials FAVOR CANADA TREASURY BILLS FAVOR U S FAVOR CANADA PRIME FINANCE PAPER i j J ixlj i_li_i FAVOR US 1 1 I I 111 I I I 1969

Cfcert IU SELECTED SHORT-TERM INTEREST RATES' IP Per cent per annum GERMANY U.K. US JAPAN CANADA! 1968 1970 1972 * 3-month treasury m lor om countries escapt Japan(Avera e rate on bank loons end discounts jffa Germen^leWrW# Leon Kate)

Chart 12B SELECTED SHORT-TERM INTEREST RATES* Per cent per annum EURO DOLLAR - LONDON US. SWITZERLAND 1968 1970 1972 * 3-month treasury bill rate for U S, Switzerland-3 month deposit rate. * * 3-month rate for U S dollar deposits.n London.

Chert 13 ^ LONG TERM BOND YIELDS Weekly ) cures Per cent per annum NETHERLANDS CANADA US. SWITZERLAND 11 U.K. GERMANY EURO DOLLAR BONDS Monthly figures T 10 U S. CORF. DOLLAR EURO-BONDS US.». Aaa BONDS US. CORP. DM EURO-BONOS 1968 19*9 1970 1971 1972 *Ne* series for Siturteei starts t t-ca. U.S. Cerp. OeMar Euro-Bonds and U.S. Corp DM Euro Bonds starts 12 70 **##** Awerege yield «f Carmem fa Beads begins 1-7-69. **;New series F starts 12 71,

CHART 14 INDUSTRIAL STOCK INDEXES r_yv i i UNITED STATES, A w 1 1! :! 1 i! ' i i 1 i 11 i i 1 N i i i V i i 1 1! 1 1 1 1 1 SWITZERLAND z 1958=100 Ratio scale 280 200 480 360 UNITED KINGDOM r j i j m! i i 1 i i 1 i i 1 1 1 1 1 i 1 i 1 i 1 i 11 i 1 i! 1 i 1 i 1 1 160 1 1 L! 480 f fss JAPAN/^ 1 h r : 240 360 GERMANY Z^Xz Y CANADA ' 240 i I I 1! I I 1 i i i i i i i i 1969 1970 1971 1972 * Japan index of 225 industrial and other stocks traded on Tokyo exchange. ** Japan index of all industrial and other stocks traded on the first section of the Tokyo Stock Exchange.

H. 13 IV. SELECTED CENTRAL BANK DISCOUNT RATES No. 456 v Country Current Rate In Effect Since Previous Rate In Effect Since EEC.: Belgium France Germany Italy Netherlands 4.5 Feb. 5, 1972 5.0 Jan. 6. 1972 6.0 Jan. 13. 1972 6.50 Oct. 29. 1971 4.0 Dec. 23. 1971 4.5 fw. 1L 1071 4.5 Oct. 14. 1971 S.O kpr. S; 1971 4.5 Jan. 6, 1972 5.0 lent.15. 1971 Switzerland United Kingdom 3.75 Sept. 15, 1969 3.0 rulv 10. 1967 5.0 Sept. 3. 1971 6.0 Aor. 1. 1971 Canada Japan 4.75 Oct. 25, 1971 5.25 Feb. 24. 1971 4.75 Dec. 29, 1971 5.25 Julv 28. 1971 United States 4.50 Dec. 13, 1971 4.75 Nov. 11, 1971

IV-2 LATEST FIGURES PLOTTED ON THE CHARTS Chart Panel Series Date Rate 1A Upper Swiss franc Feb. 18-0.350 U.K. pound i -0.190 Lower French franc ii +0.559 Japanese yen +1.332 IB Upper Belgian franc ii +2.239 Italian lire " -0. 867 Lower Canadian dollar Actual rate 99.52 German mark +1.502 Dutch guilder +2.169 2A German mark n +1.27 Swiss franc " +4.31 U.K. pound : ii -0.52 26 Upper Dutch guilder i +0.72 Canadian dollar " -0.68 French franc ii -0.32 Lower Japanese yen ii 3A German mark ii +1.94 U.S. dollar " +0.30 3b Swiss franc i +4.00 French franc ii +0.21 4 Gold price, U.S. dollar per ounce ii 48.16 5A Upper Overnight Euro-S deposits Feb. 16 3.25 Federal Funds 3.43 Middle Differential -0.18 Lower Euro-currencies: Euro DM Feb. 18 3.75 Euro Swiss Fr. " 0.62 5b Upper Japan, Unconditional Money Feb. 4 5.00 U.K., 2-day Local Author. Deps. " 11 4.69 Canada, Day-to-day Loans " 9 3.85 Lower France, Day-to-Day Money " 18 5.25 i Germany, Call Money " 18 3.62 1 Netherlands, CalJ Money " 28 2.78 Digitized for FRASER

IV - 3 Chart Panel Series Date Rate 6A Euro-S 7-Day Rate Feb. 18 3.50 Euro-S 1-month Rate ii 6B Euro-$ 3-month Rate H Euro-$ 6-month Rate it 4.56 5.00 5.56 7A Upper Euro-S 3-month Deposits Feb. 16 4.94 U.S. Certificate of Deposits 3.50 Lower Differential ii +1.44 7B Upper Euro-S 3-month Deposits ii Euro-S 3-month Deposits (Adj.) U.S. Certificate of Deposits (Adj.) 4.94 6.18 3.95 Lower Differential: on Adj. Euro-S Deposits ii +2.23 on Unadj. Euro-S Deposits 8A Upper Euro-$ 3-month Deposits Hire Purchase Deposits (covered) Lower Differential 86 Upper Euro-S 3-month Deposits Local Authority Deposits (covered) +0.99 Feb. 4 5.16 4.55-0.61 5.16 ii 4.55 Lower Differential n -0.61 9A U.S. Treasury Bill rate it 2.97 U.K. Treasury 6ill rate 4.32 Local Authority Deposit (uncovered) Feb. 11 4.88 96 Upper Spread (+= favor London) 18 +1.35 3-month Forward Pound -0.44 Lower Net Incentive (+- favor London) " +0.91

IV- 4 Chart Panel Series Date Rate 10A Upper Euro-S Deposits (covered) German Interbank Loan rate Feb. 16 3.92 II 4.88 Lower Differential +0.96 10B Upper Euro-) Deposits (covered) Swiss Deposit rate 0.68 0. 50d Lower Differential II -0.18 \ 11 Upper Canadian Finance Paper Feb. 18 4.50 1 Second U.S. Treasury Bill rate 2.97 j Canadian Treasury Bill rate U.S. Prime Finance paper (not plotted) Bill rate differential II 3.40 3.75 +0.43! Forward Canadian dollar n -0.92 Third Net incentive on bills Bottom Net incentive on Finance Paper 12A Upper U.K. Treasury Bill rate -0.49-0.17 4.32 U.S. Treasuiy Bill rate II 2.97 Lower German interbank Loan rate Japanese Average rate Canadian Treasury Bill rate Feb. 16 4.88 December 7.457 Feb. 18 3.40 U.S. Treasury Bill rate II 2.97 1 12 B Euix>-$ Deposits 5.00 * Swiss 3-month Deposit rate U.S. Treasury Bill rate II 0. 50p Feb. 18 2.97

Vti IV-5 Chart Panel Series Date Rate 13 Upper Netherlands Jan. 7 Jan. 28 Middle Canada United States Switzerland * Germany United Kingdom Euro-dollar bonds Lower U.S. Corp. Dollar Euro-bonds *** U.S. Corp. DM Euro-bonds *** ii U.S. Corp. Aaa bonds 14 Upper Switzerland Middle Lower Germany United States United Kingdom Canada '* Japan 7.17 6.93 Feb. 9 6.51 16 5.53 " 11 4.69 Jan. 31 7.45 Feb. 11 8.34 Feb. 18 7.2 January 7.81 7.15 7.19 Feb. 11 415.7 Feb. 7 275.2 18 237.57 278.07 " 10 239.84 " 12 481. 75 United States " 18 237.57 * 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 Slock Exchange. *** Series F.