Foreign exchange reserves are the foreign A currency is a unit of exchange, facilitating the transfer of goods and services. It is a form of money, where money is defined as a medium of exchange rather than e.g. a store of value. A currency zone is a country or region in which a specific currency... currency deposits held by The term national bank has several meanings: especially in developing countries, a bank owned by the state an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally) In the past, the term national bank has been used synonymously with central bank, but it is... national banks of different nations. These are assets of Governments which are held in different hard currencies such as The United States dollar is the official currency of the United States. It is also widely used as a reserve currency outside of the United States. Currently, the issuance of currency is controlled by the Federal Reserve Banking system. The most commonly used symbol for the U.S. dollar is... Dollar, Euro (disambiguation). The euro (€; ISO 4217 code EUR) is the currency of twelve of the twenty-five European Union member states. These twelve states, which form the Economic and Monetary Union (EMU), are: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. It is... Euro, A 1,000 yen note, featuring the portrait of Natsume Soseki. New yen notes entered circulation, replacing these, on November 1, 2004. Yen is the currency used in Japan. It is also widely used as a reserve currency after the United States Dollar and Euro. In Japanese it is usually... Yen and The pound sterling, which strictly speaking refers to basic currency unit of sterling, now the pound, can generally refer to the currency of the United Kingdom (UK). The standard ISO 4217 currency code is GBP = Great British Pound, (UKP is non-standard and sometimes wrongly used) The sign for the... Pound Sterling.

Uses

Central banks accumulate foreign reserves as a way to affect the exchange rates. By printing local currency and then exchanging it for a foreign currency, central banks increase the supply of the home currency on the foreign exchange markets. This puts a pressure on the home currency to depreciate, and conversely makes foreign currencies appreciate relative to the home currency. Currency depreciation is used by government to make local exporters more competitive at the expense of making imports and capital purchases more expensive.

When a country accumulates a large amount of reserves relative to the amount of local currency outstanding, it may establish an exchange rate peg. One example of such a peg is the Chinese peg of the Yuan (also known as the Remnimbi) to the US Dollar. If the level of reserves later falls or inflation picks up, investors may start to question the 'sustainability' of a peg, and put speculative pressure on the currency. When the country is no longer able to sustain the pressure, the peg collapses and a currency crisis ensues. When investors started questioning Argentinian government's ability to pay off its debt in 2001, the peso's peg to the dollar This article is in need of attention. Please see its listing on Pages needing attention and improve it in any way you see fit. When the issues regarding this page have been resolved, remove this notice and the listing, but please do not remove this notice until the article has... collapsed and resulted in a depression in the local economy.

Levels

The countries with the largest foreign reserves are Official language Japanese Capital Tokyo Largest City Tokyo Emperor Akihito Prime Minister Junichiro Koizumi Area  - Total  - % water Ranked 60th 377,835 km² 0.8% Population  - Total ( 2004)  - Density Ranked 10th 127,333,002 337/km² GDP  - Total (PPP, 2005)  - Total (nominal)  ... Japan ($838 billion, March 2005), The Great Wall of China, stretching over 6,700 km, was erected beginning in the 3rd century BC to guard the north from raids by men on horses. China  listen? ( Traditional: 中國; Simplified: 中国; pinyin: ; Wade-Giles: Chung-kuo) is a nation located chiefly in continental East... China ( Mainland $659 billion, For the political entity commonly known as Taiwan, see Republic of China. Map of Taiwan The island of Taiwan (Traditional: 臺灣, Simplified: 台湾, Pinyin: Táiwān, Wade-Giles: Tai-wan, Taiwanese: Tâi-oân) is located off the coast of mainland China in the... Taiwan $251 billion, Hong Kong (香港; Cantonese IPA: ; Jyutping: hoeng1 gong2; Yale: heūng góng; pinyin: Xiānggǎng; Wade-Giles: Hsiang-kang) is one of the two Special Administrative Regions of the Peoples Republic of China. (The other one is Macau.) Administratively, the name Hong Kong... Hong Kong $122 billion, March 2005), the South Korea, officially the Republic of Korea (ROK; Korean: Daehan Minguk (Hangul: 대한 민국; Hanja: 大韓民國)), is a country in East Asia, covering the southern half of the Korean Peninsula. To the north, the Republic of Korea borders North Korea, with which it formed a... Republic of Korea ($205 billion, March 2005), The Republic of India is the second most populous country in the world, with a population of more than one billion, and is the seventh largest country by geographical area. India has grown significantly, both in population and in strategic importance in the last two decades. The Indian economy is... India ($141 billion, March 2005) and The Russian Federation ( Russian: Росси́йская Федера́ция, transliteration: Rossiyskaya Federatsiya or Rossijskaja Federacija), or Russia (Russian: Росси́я, transliteration: Rossiya or Rossija), is a country that stretches... Russia ($137 billion, March 2005).

See also

• A reserve currency is a currency which is held in significant quantities by other governments and institutions as part of their foreign exchange reserves. The United States Dollar is the most important reserve currency in the world today, followed by the Euro, the Japanese Yen, the Pound Sterling and the... Reserve currency

External links

Articles

• WSJ.com - Speculative Funds Going to China Worry Officials About Yuan's Peg (http://online.wsj.com/article/0,,SB110011541276170369,00.html?mod=economy%5Flead%5Fstory%5Flsc)
• China: behind the growing foreign exchange reserves - 2004-11-01 (http://en.ce.cn/Insight/200411/01/t20041101_2147714.shtml)
• United Nation Database for foreign reserve (A little tricky to use) (http://unstats.un.org/unsd/cdbdemo/cdb_class_xrxx.asp?class_code=83)
• Current Foreign Exchange of different countries with Detail (http://www.imf.org/external/np/sta/ir/colist.htm)
• Foreign Exchange Reserves in East Asia: Why the High Demand? (2003-11, 04/25/2003) (http://www.frbsf.org/publications/economics/letter/2003/el2003-11.html)

Data

• Foreign Exchange of different countries annually (http://investintaiwan.nat.gov.tw/en/env/stats/foreign_exchange.html)
• Press Release: Revised IMF Annual Report Data on Official Foreign ... - November 19, 2003 (http://www.imf.org/external/np/sec/pr/2003/pr03196.htm)

Speeches

• FRB: Speech, Greenspan -- Currency reserves and debt -- April 29, 1999 (http://www.federalreserve.gov/boarddocs/speeches/1999/19990429.htm)