Reserve Currency
A foreign currency held by central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate. Investopedia Says:
Currently, the U.S. dollar is the primary reserve currency used by other countries. A very large percentage of commodities such as gold and oil are usually priced in U.S dollars, causing other countries to hold this currency to pay for these goods. A large debate still continues about whether or not the U.S. dollar will stay the main reserve currency or if it will shift over to the euro. Related Terms:
Central Bank
Currency Internationalization
Euro Currency
Federal Reserve System
Fixed Exchange Rate System
Monetary Base
Monetary Policy
Sovereign Wealth Fund - SWF |