Currency that, due to its general confidence, is used as a reserve or means of international payment in product exchanges between countries. It is maintained as a prominent part of the reserve volume held by both governments and central banks. Reserve currency status is usually enjoyed by the currencies of the world’s major economies. Traditionally, the US dollar has been the primary reserve and exchange currency in international transactions, although the euro has gained weight in the last decade. Establishing oneself as a reserve currency-issuing country allows for significant savings in international markets, as there is no need to change the currency to operate internationally, it offers more liquidity, and provides greater room to maintain a trade deficit.
« Back to Glossary IndexReserve currency
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