Foreign Currency Reserves

Foreign currency reserves are assets held by a country’s central bank in various foreign currencies. These reserves help maintain the stability of the national currency, support international trade, and manage exchange rates. They can be used to pay for imports, settle international debts, and respond to economic crises. By having reserves, a country can reassure investors and stabilize its economy during fluctuations in the global market. Essentially, foreign currency reserves act as a financial buffer, ensuring the country can meet its foreign obligations and maintain confidence in its currency.