Monetary reserve

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Monetary Reserve

The foreign currencies and precious metals that a central bank holds. A central bank's monetary reserve allows it to regulate its own currency; that is, a central bank with a large amount of reserves in euros is likely to closely follow or even peg its currency to the euro. On the other hand, central banks that keep monetary reserves in multiple currencies are more likely to follow either a basket peg or to have a floating currency. A monetary reserve is also called a currency reserve.

Monetary reserve.

A government's monetary reserve includes the foreign currency and precious metals that its central bank holds. That reserve enables the government to influence foreign exchange rates and to manage its transactions in the international marketplace.

For example, a country with a large reserve of US dollars is in a position to make significant investments in US markets.

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References in periodicals archive ?
Japan should halt the yen's fall against other major currencies by purchasing yen with unnecessary foreign exchange reserves it built up in previous currency market interventions, the Financial Times said in its editorial Wednesday.
The overall foreign exchange reserves in June this year totaled 2.
TOKYO, Jan 14 (KUNA) -- Japan's foreign exchange reserves fell for the third straight month to USD 1.
609 billion, former Advisor Finance Ministry and a financial expert Saqib Sherani attributed the growth in foreign exchange reserves to rising home remittances and exports receipts.
According to this report, the management of the foreign exchange reserves in the last period was conducted in conditions of a big economic crisis.
When the sovereign's ratings were initially assigned, Fitch warned that continued financial system weakness, combined with a lack of progress on the reform front and further pressure on the Dominican Republic's modest foreign exchange reserves, could have a negative impact on the country's sovereign ratings.
TOKYO, Nov 7 (KUNA) -- Japan's foreign exchange reserves fell for the first time in four months to USD 1.
The state's total foreign exchange reserves in the National Bank now exceed 1.
KARACHI, 19 March , 2009 (Frontier Star) -- Foreign Exchange reserves of Pakistan has been boosted again, as $ 100.
609 billion , former Advisor Finance Ministry and a financial expert Saqib Sherani attributed the growth in foreign exchange reserves to rising home remittances and exports receipts.
On October 31st 2009, National Bank of Romania's foreign exchange reserves stood at EUR 28,402 million, compared to EUR 28,339 million on September 30th 2009.
Japan's foreign exchange reserves consist mainly of securities and deposits denominated in foreign currencies, International Monetary Fund reserve positions, IMF special drawing rights and gold.

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