Reserve currency


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Reserve currency

A foreign currency held by a central bank or monetary authority for the purposes of exchange intervention and the settlement of intergovernmental claims.

Reserve Currency

A foreign currency held by a central bank or occasionally a major financial institution that may be used to settle international debts or transactions. A reserve may also be used to affect the exchange rate of the domestic currency. The most common reserve currency worldwide is the U.S. dollar, though the British pound, Japanese yen, and euro are also very common. See also: SDR.
References in periodicals archive ?
In addition, recent government intervention in the stock market and suspension of stocks during a sharp market downturn could have an impact on the reform process and the progress made toward RMB gaining international reserve currency status.
In sum, the future of the dollar's reserve currency status seems quite certain.
A fully open capital account has no restrictions; and (3) reserve currency whether the renminbi is held by foreign central banks as protection against balance of payments crises.
This made 2012 the third year in a row the euro has declined in popularity as a reserve currency, putting its share at the lowest level since 2000.
He bases that belief on the idea that reserve currency status is based on economic strength and that Europe has economic strength and that China and India are growing in economic strength.
Fahad Alturki, senior economist at the Riyadh-based Jadwa Investment, said: "It is less likely that the dollar will lose its status as the main reserve currency in the near future despite the current challenges facing the US economy.
The demise of the pound-sterling during the Great Depression as a result of runs on the Bank of England left only the dollar as a viable candidate for use as the world's preferred reserve currency.
The Great Recession and the European sovereign debt crisis have recently stalled the euro's ascent as the key reserve currency, but not the diversification out of dollars.
Alistair Cotton, corporate dealer at Currencies Direct, says that "the Dollar is the global reserve currency and any issues surrounding Iran and the supply of oil will be US Dollar positive because investors seek safe haven assets and the Dollar is the top of the tree".
The Sidra Capital hosted seminar focused on the US dollar and its future as world's reserve currency.
It called for a new global reserve currency in a bid to shanghai American power after the US's loss of its triple-A credit rating left it open to hijack.
It also called for a 'stable' global reserve currency to stop fresh rounds of financial turmoil.

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