Monetary Reserve
Categories: Econ
Ooohhh, the treasures...the riches...the monetary reserve.
A country’s monetary reserve is the central bank’s treasure chest of money and metals (if any; it used to be commonplace to back currency with gold and/or silver).
Okay, it’s not really a treasure chest, but it might as well be, right? The monetary reserve isn’t just for the Fed Chairman to make snow angels in gold coins, but comprises the holdings the country has to change the money supply as they see fit. Literally. Printing. Money.
While the monetary reserve for most countries does include some of their own currency, they’ll often also include a more powerful, stable currency if theirs isn’t so hot on the global market. It’s no surprise then that the U.S. dollar is a common currency hanging out in monetary reserves of nations’ central banks that are...not the U.S.