Okuzeka
Economics vocabulary · Central Banks and Interest Rates

Foreign exchange reserves

Meaning in economics, with examples

nounCommon term

In economics, foreign exchange reserves means: Assets in foreign currencies, such as dollars and euros, held by a central bank to pay for imports, repay foreign debt or support the national currency.

In Turkish: döviz rezervleri, uluslararası rezervler

How it is used

Often shortened to FX reserves or just reserves; together with gold they form a country's international reserves. Reserves rise, fall, are rebuilt or run down. Analysts discuss gross and net reserves and how many months of imports the reserves cover.

Example sentences

  1. The central bank sold part of its foreign exchange reserves to slow the currency's fall.

  2. Foreign exchange reserves now cover about six months of imports.

Common collocations

  • FX reserves
  • net reserves
  • gross reserves
  • rebuild reserves
  • reserve adequacy
  • central bankThe national institution that issues a country's currency, sets the main interest rate and works to keep prices and the financial system stable.
  • exchange rateThe price of one currency expressed in another, for example how many Turkish lira you need to buy one US dollar or one euro.
  • balance of paymentsA record of all money flows between a country and the rest of the world over a period, divided into the current account and the capital and financial account.
  • currencyThe system of money used in a country, such as the lira, the euro or the dollar; foreign currency means money from other countries.
  • IMFShort for International Monetary Fund: an international organisation that monitors the world economy and lends to member countries facing balance of payments problems.

More terms: Central Banks and Interest Rates

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This page explains English vocabulary for learners. It is not financial advice.