What are foreign exchange reserves?
Foreign exchange reserves are international liquid assets managed by a monetary authority for external payments and policy needs.
Definition, calculation and mechanism
Foreign currency, gold and certain international reserve assets may be included. Gross holdings differ from net measures after short-term liabilities. Borrowing or valuation changes can raise reported reserves.
Interpretation, examples and limits
Months of import cover and ratios to short-term external debt provide context, but one threshold does not fit every country. Intervention and confidence effects depend on conditions.
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