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 ?
Economists claim that the yuan is apparently becoming one of the world's major reserve currencies, such as the US dollar or the euro.
The HSBC executive said that the inclusion of the RMB in the International Monetary Fund (IMF)'s special drawing rights (SDR) inclusion had now catapulted it into the ranks of the world's most important reserve currencies.
The International Monetary Fund has designated four currencies as reserve currencies available for stabilizing monetary markets: the US dollar, the Japanese yen, the euro and the British pound.
The IMF hinted it needed to do "significant work" in reviewing the inclusion of China's national currency in its basket of reserve currencies.
The main challenge facing the euro, the yuan, and other emerging market currencies in becoming international reserve currencies is developing deeper domestic financial markets through which positive network externalities and a wider use of reserves in private sector transactions can arise.
Flexible exchange rate: Reserve currencies generally trade freely at market-determined exchange rates.
He believes that the world is heading to a state where there are several reserve currencies, notably the euro and the Chinese renminbi.
The central bank on Monday called for inclusion of emerging market currencies as alternative reserve currencies to the dollar.
The intriguing, but unanswered, question is: what currencies are now replacing the dollar, the euro, and the other traditional reserve currencies in these portfolios?
We believe this is a great opportunity for anyone who earns income from or holds wealth in any of the main reserve currencies," Robinson said.
By solely comparing the currencies in terms of their role as reserve currencies, Chinn and Frankel (2005) said that the euro might increase its share of foreign reserve currency and eventually go beyond the share of the dollar as a reserve currency if the U.
The German authorities feared that the country's export-oriented economy would suffer from the wide exchange-rate swings that are the norm for global reserve currencies.

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