reserve currency
Global financial backstop
A reserve currency is a foreign currency held in large quantities by central banks and governments as part of their financial reserves.
The U.S. dollar has been the world's primary reserve currency since World War II, used for international trade and as a benchmark for commodity prices.
Countries hold reserve currencies to stabilize their own currency, pay international debts, and maintain confidence in their economy: China holds trillions in dollar-denominated assets as reserve currency.
National currency management institution
- balance of paymentsNation's international transaction record
- current accountBank account for regular transactions
- capital flowsMovement of investment money
- monetary policyCentral bank economic controls
Protected place of shelter
- store of valueAsset that maintains worth
- trustConfidence in another
- confidenceSelf-assurance or trust
- credibilityQuality inspiring trust
price stability · liquidity · depth · predictability · rule of law · capital markets · bond market · treasury securities
Measure of ultimate quality
- sterlingPure silver alloy
- pound sterlingBritain's official money
- British EmpireVast colonial domain
- Spanish dollarColonial-era silver coin
transition · decline · emergence · post-war · interwar · nineteenth century · colonial trade
Dominant group's control
- petrodollarRevenue from crude exports
- geopoliticsGeography's role in statecraft
- dollarizationAdopting foreign currency officially
- dedollarizationReducing USD in reserves
multipolar · unipolar · sanctions · weaponization · SWIFT · leverage · primacy
central bank
National currency management institution
- balance of paymentsNation's international transaction record
- current accountBank account for regular transactions
- capital flowsMovement of investment money
monetary policy · convertibility · denomination · IMF · World Bank
safe haven
Protected place of shelter
- store of valueAsset that maintains worth
- trustConfidence in another
- confidenceSelf-assurance or trust
credibility · price stability · liquidity · depth · predictability · rule of law · capital markets · bond market · treasury securities · benchmark
gold standard
Measure of ultimate quality
- sterlingPure silver alloy
- pound sterlingBritain's official money
- British EmpireVast colonial domain
Spanish dollar · transition · decline · emergence · post-war · interwar · nineteenth century · colonial trade
hegemony
Dominant group's control
- petrodollarRevenue from crude exports
- geopoliticsGeography's role in statecraft
- dollarizationAdopting foreign currency officially
dedollarization · multipolar · unipolar · sanctions · weaponization · SWIFT · leverage · primacy
- currencydollar, euro, pound, yen, peso
- moneydollar, euro, coin, cash, pound
- reservessurplus funds, nature preserve, wildlife refuge, emergency fund, rainy day fund
- economic policymonetary policy, tax policy, fiscal discipline, fiscal stimulus, fiscal restraint
- global financeinternational banking, financial hubs, central banks, capital flows, exchange rates
- currency typeslegal tender, gold standard, dollarized
reserve, reserved, currency, reservation, conservative, reserves, conservation, preservation, unreserved