ForexAll marketsIntermediate

Reserves

a.k.a. Bank reserves, FX reserves, Foreign exchange reserves

Money set aside: bank cash held at the central bank, or a country's stockpile of foreign currencies and gold.
In plain English

Money set aside: bank cash held at the central bank, or a country's stockpile of foreign currencies and gold.

Reserves means two related things. Bank reserves are the balances commercial banks keep at the central bank, the base layer of the money system. Foreign exchange reserves are a country's war chest of foreign currencies, bonds and gold, held by its central bank.

FX reserves matter a lot in forex. A country with deep reserves can defend its currency by selling them to buy its own money. A country running low cannot, and markets can smell the weakness: that is often how pegs break.

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