Government Monetary Reserve

A Government Monetary Reserve is a financial reserve held by a national government, typically composed of foreign currency reserves, gold reserves, and other liquid assets.

• Context:
  • It can be used to support and stabilize the national currency by influencing exchange rates.
  • It can (typically) include holdings in major foreign currencies, such as USD, EUR, and JPY.
  • It can act as a buffer to ensure the government can meet its international payment obligations.
  • It can be employed to intervene in foreign exchange markets to prevent or mitigate financial crises.
  • It can (often) consist of a combination of assets, including gold bullion, Special Drawing Rights (SDRs), and foreign government securities.
  • It can be managed by a country's central bank or finance ministry as part of its broader economic policy.
  • It can be used to ensure the country has sufficient liquidity to meet external debt obligations.
  • ...
• Example(s):
  • United States Government Monetary Reserves (of the U.S. government), composed largely of foreign currencies, gold reserves, and US Treasury securities, and managed typically by the U.S. Federal Reserve.
  • China's Government Monetary Reserves (of the Chinese government), composed largely of US Treasury securities, foreign currencies, and gold reserves, and managed typically by the People's Bank of China.
  • Japan's Government Monetary Reserves (of the Japanese government), composed largely of foreign currencies, particularly the US dollar, and gold reserves, and managed typically by the Bank of Japan.
  • European Central Bank Government Monetary Reserves (of the Eurozone), composed largely of foreign currencies, including USD and JPY, and gold reserves, and managed typically by the European Central Bank.
  • Russia's Government Monetary Reserves (of the Russian government), composed largely of gold reserves, foreign currencies, and other liquid assets, and managed typically by the Central Bank of Russia.
  • India's Government Monetary Reserves (of the Indian government), composed largely of gold reserves, foreign currencies, and Special Drawing Rights (SDRs), and managed typically by the Reserve Bank of India.
  • Switzerland's Government Monetary Reserves (of the Swiss government), composed largely of gold reserves, foreign currencies, and financial securities, and managed typically by the Swiss National Bank.
  • United Kingdom's Government Monetary Reserves (of the UK government), composed largely of gold reserves, foreign currencies, and government bonds, and managed typically by the Bank of England.
  • ...
• Counter-Example(s):
  • A Sovereign Wealth Fund, which is typically invested in a broader range of assets beyond currency and gold.
  • National Budget Reserves, which are allocated for specific government spending rather than currency stabilization.
• See: Gold Reserve, Foreign Exchange Reserve, Central Bank, Currency Stabilization, Sovereign Wealth Fund.

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References

2015

• (Wikipedia, 2015) ⇒ http://en.wikipedia.org/wiki/Gold_reserve Retrieved:2015-7-24.
  • A gold reserve is the gold held by a national central bank, intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, or to secure a currency.

    It has been estimated that all the gold mined by the end of 2011 totalled 171,300 tonnes. At a price of US$1,500 per troy ounce, reached on 12 April 2013, one tonne of gold has a value of approximately US$48.2 million. The total value of all gold ever mined would exceed US$8.2 trillion at that valuation.

    However, there are varying estimates of the total amount of gold mined to date, mainly because gold has been mined for thousands of years around the world. Another reason is that some countries are not particularly open about how much gold they are mining. In addition, it is difficult to account for gold output in illegal mining activities.

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