the United States, including US monetary policy actions, have significant effects on growth and inflation in foreign economies. Although the Federal Reserve s policy objectives are limited to economic outcomes in the United States, it is mutually beneficial for macroeconomic and financial policy makers in the United States and other countries to maintain a continuous dialogue. This dialogue enables the Federal Reserve to better understand and anticipate influences on the US economy that emanate from abroad. increasing complexity of global financial markets-combined with ever-increasing linkages between national markets through trade, finance, and direct investment-have led to a proliferation of forums in which policy makers from different countries can meet and discuss topics of mutual interest. One important forum is provided by the Bank for International Settlements (BIS) in Basel, Switzerland. Through the BIS, the Federal Reserve works with representatives of the central banks of other countries on mutual concerns regarding monetary policy, international financial markets, banking supervision and regulation, and payments systems. (The Chairman of the Board of Governors and the president of the Federal Reserve Board of New York represent the US central bank on the board of directors of the BIS.) Representatives of the Federal Reserve also participate in the activities of the International Monetary Fund ( IMF) and discuss macroeconomic, financial market, and structural issues with representatives of other industrial countries at the Organization for Economicoperation and Development (OECD). Following the Asian Financial Crises of 1997 and 1998, the Financial Stability Forum (FSF) was established to enable central banks, finance ministries, and financial regulatory authorities in systemically important economies to work together to address issues related to financial stability. The Federal Reserve also sends delegates to international meetings such as those of the Asia Pacific Economic Cooperation (APEC) Finance Ministers Process, the G-7 Finance Ministers and Central Bank Governors, the G -20, and the Governors of Central Banks of the American Continent. Currency Operations Federal Reserve conducts foreign currency operations-the buying and selling of dollars in exchange for foreign currency-under the direction of the FOMC, acting in close and continuous consultation and cooperation with the US Treasury, which has overall responsibility for US international financial policy . The manager of the System Open Market Account at the Federal Reserve Bank of New York acts as the agent for both the FOMC and the Treasury in carrying out foreign currency operations. Since the late 1970s, the US Treasury and the Federal Reserve have conducted almost all foreign currency operations jointly and equally. purpose of Federal Reserve foreign currency operations has evolved in response...
