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Rezerwy walutowe – Foreign Exchange Reserves

Seven Ways Central Banks Use Foreign Exchange Reserves

Foreign exchange reserves are the foreign currencies held by a country’s central bank. They are also called foreign currency reserves or foreign reserves. There are seven reasons why banks hold reserves. The most important reason is to manage their currencies’ values.

How Foreign Exchange Reserves Work

The country’s exporters deposit foreign currency into their local banks. They transfer the currency to the central bank. Exporters are paid by their trading partners in U.S. dollarseuros, or other currencies. The exporters exchange them for the local currency. They use it to pay their workers and local suppliers.

The banks prefer to use the cash to buy sovereign debt because it pays a small interest rate. The most popular are Treasury bills. That’s because most foreign trade is done in the U.S. dollar. That’s because of its status as the world’s global currency.

Banks are increasing their holdings of euro-denominated assets, such as high-quality corporate bonds. That continued despite the eurozone crisis. They’ll also hold gold and special drawing rights. A third asset is any reserve balances they’ve deposited with the International Monetary Fund.

 

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Purpose

There are seven ways central banks use foreign exchange reserves.

First, countries use their foreign exchange reserves to keep the value of their currencies at a fixed rate.

 A good example is China, which pegs the value of its currency, the yuan, to the dollar. When China stockpiles dollars, it raises the dollar value compared to that of the yuan. That makes Chinese exports cheaper than American-made goods, increasing sales.

Second, those with a floating exchange rate system use reserves to keep their value of their currency lower than the dollar.

 They do this for the same reasons as those with fixed rate systems. Even though Japan’s currency, the yen, is a floating system, the Central Bank of Japan buys U.S. Treasuries to keep its value lower than the dollar. Like China, this keeps Japan’s exports relatively cheaper, boosting trade and economic growth. Such currency trading takes place in the foreign exchange market.

A third, and critical, function is to maintain liquidity in case of an economic crisis. For example, a flood or volcano might temporarily suspend local exporters’ ability to produce goods. That cuts off their supply of foreign currency to pay for imports. In that case, the central bank can exchange its foreign currency for their local currency, allowing them to pay for and receive the imports.

Similarly, foreign investors will get spooked if a country has a war, military coup, or other blow to confidence. They withdraw their deposits from the country’s banks, creating a severe shortage in foreign currency. This pushes down the value of the local currency since fewer people want it. That makes imports more expensive, creating inflation.

The central bank supplies foreign currency to keep markets steady. It also buys the local currency to support its value and prevent inflation.

 This reassures foreign investors, who return to the economy.

A fourth reason is to provide confidence. The central bank assures foreign investors that it’s ready to take action to protect their investments. It will also prevent a sudden flight to safety and loss of capital for the country. In that way, a strong position in foreign currency reserves can prevent economic crises caused when an event triggers a flight to safety.

Fifth, reserves are always needed to make sure a country will meet its external obligations. These include international payment obligations, including sovereign and commercial debts. They also include financing of imports and the ability to absorb any unexpected capital movements.

Sixth, some countries use their reserves to fund sectors, such as infrastructure. China, for instance, has used part of its forex reserves for recapitalizing some of its state-owned banks.

 Seventh, most central banks want to boost returns without compromising safety. They know the best way to do that is to diversify their portfolios. That’s why they’ll often hold gold and other safe, interest-bearing investments.

Guidelines

How much are enough reserves? At a minimum, countries have enough to pay for three to six months of imports. That prevents food shortages, for example.

Another guideline is to have enough to cover the country’s debt payments and current account deficits for the next 12 months. In 2015, Greece was not able to do this. It then used its reserves with the IMF to make a debt payment to the European Central Bank. The huge sovereign debt the Greek government incurred led to the Greek debt crisis.

By Country

The countries with the largest trade surpluses are the ones with the greatest foreign reserves. That’s because they wind up stockpiling dollars because they export more than they import. They receive dollars in payment.

Here are the countries with reserves more than $100 billion as of December 2017:

Country Reserves (in billions) Exports
China  $3,194.0  Consumer products, parts.
Japan  $1,233.0 (2016)  Auto, parts, consumer products.
European Union    $740.9 (2014)  Machinery, equipment, autos.
Switzerland    $679.3 (2016)  Financial services.
Saudi Arabia    $509.0  Oil. Hurt by low prices.
Taiwan    $468.1  Machinery, electronics.
Russia    $418.5  Natural gas, oil. Hurt by sanctions
India    $407.2  Tech, outsourcing
Hong Kong    $328.5  Electrical machinery, apparel.
Brazil    $377.1  Oil, commodities.
South Korea      $374.8  Electronics.
Singapore    $266.3  Consumer electronics, tech.
Thailand    $193.5  Electronics, food.
Mexico    $189.2  Oil. Hurt by low prices.
Germany    $185.3 (2016)  Autos.
Czech Republic    $161.0  Autos, machinery.
France    $146.8 (2016)  Machinery, aircraft.
Italy    $136.0 (2016)  Engineered products, apparel
United Kingdom    $135.0 (2016)  Manufactured goods, chemicals.
Iran    $135.5  Oil due to nuclear deal.
Indonesia    $106.5  Oil, palm oil.
United States    $117.6 (2016)  Aircraft, industrial machines.
Poland    $115.0  Machines, iron, and steel.
Israel    $133.0  Aviation, high tech.
Turkey    $107.5  Auto, apparel.

 

1      China                                              $3,194,000,000,000                                
2      Japan                                              $1,217,000,000,000                                
3      European Union                                     $740,900,000,000                                  
4      Switzerland                                        $679,300,000,000                                  
5      Saudi Arabia                                       $509,000,000,000                                  
6      Taiwan                                             $468,100,000,000                                  
7      Russia                                             $418,500,000,000                                  
8      India                                              $407,200,000,000                                  
9      Hong Kong                                          $398,300,000,000                                  
10     Brazil                                             $377,100,000,000                                  
11     Korea, South                                       $374,800,000,000                                  
12     Singapore                                          $266,300,000,000                                  
13     Thailand                                           $193,500,000,000                                  
14     Mexico                                             $189,200,000,000                                  
15     Germany                                            $185,300,000,000                                  
16     Czechia                                            $161,000,000,000                                  
17     France                                             $146,800,000,000                                  
18     Italy                                              $136,000,000,000                                  
19     United Kingdom                                     $135,000,000,000                                  
20     Iran                                               $132,600,000,000                                  
21     Indonesia                                          $122,500,000,000                                  
22     United States                                      $117,300,000,000                                  
23     Poland                                             $115,000,000,000                                  
24     Israel                                             $113,000,000,000                                  
25     Turkey                                             $107,500,000,000                                  
26     Algeria                                            $97,670,000,000                                   
27     Malaysia                                           $97,440,000,000                                   
28     United Arab Emirates                               $89,790,000,000                                   
29     Canada                                             $85,600,000,000                                   
30     Philippines                                        $81,530,000,000                                   
31     Libya                                              $69,350,000,000                                   
32     Denmark                                            $68,800,000,000                                   
33     Spain                                              $63,140,000,000                                   
34     Peru                                               $61,340,000,000                                   
35     Norway                                             $60,450,000,000                                   
36     Australia                                          $60,300,000,000                                   
37     Sweden                                             $59,390,000,000                                   
38     Lebanon                                            $53,100,000,000                                   
39     Argentina                                          $52,970,000,000                                   
40     South Africa                                       $48,180,000,000                                   
41     Iraq                                               $47,020,000,000                                   
42     Colombia                                           $46,400,000,000                                   
43     Romania                                            $45,070,000,000                                   
44     Chile                                              $39,110,000,000                                   
45     Vietnam                                            $38,750,000,000                                   
46     Netherlands                                        $36,130,000,000                                   
47     Egypt                                              $34,020,000,000                                   
48     Bangladesh                                         $33,660,000,000                                   
49     Kuwait                                             $33,130,000,000                                   
50     Kazakhstan                                         $31,440,000,000                                   
51     Nigeria                                            $31,080,000,000                                   
52     Bulgaria                                           $27,520,000,000                                   
53     Hungary                                            $27,020,000,000                                   
54     Portugal                                           $25,130,000,000                                   
55     Belgium                                            $23,570,000,000                                   
56     Austria                                            $23,360,000,000                                   
57     Morocco                                            $22,970,000,000                                   
58     Ukraine                                            $21,800,000,000                                   
59     Turkmenistan                                       $20,600,000,000                                   
60     Pakistan                                           $20,020,000,000                                   
61     Oman                                               $19,960,000,000                                   
62     Macau                                              $19,490,000,000                                   
63     New Zealand                                        $18,320,000,000                                   
64     Angola                                             $18,100,000,000                                   
65     Qatar                                              $16,890,000,000                                   
66     Uzbekistan                                         $16,000,000,000                                   
67     Jordan                                             $15,980,000,000                                   
68     Croatia                                            $15,530,000,000                                   
69     Uruguay                                            $14,280,000,000                                   
70     Cuba                                               $12,800,000,000                                   
71     Cambodia                                           $11,290,000,000                                   
72     Finland                                            $10,800,000,000                                   
73     Serbia                                             $10,790,000,000                                   
74     Guatemala                                          $10,050,000,000                                   
75     Azerbaijan                                         $8,886,000,000                                    
76     Nepal                                              $8,668,000,000                                    
77     Trinidad and Tobago                                $8,660,000,000                                    
78     Bolivia                                            $8,287,000,000                                    
79     Kenya                                              $7,592,000,000                                    
80     Costa Rica                                         $7,523,000,000                                    
81     Paraguay                                           $7,504,000,000                                    
82     Botswana                                           $7,476,000,000                                    
83     Ghana                                              $7,345,000,000                                    
84     Greece                                             $6,893,000,000                                    
85     Venezuela                                          $6,696,000,000                                    
86     Sri Lanka                                          $6,632,000,000                                    
87     Afghanistan                                        $6,477,000,000                                    
88     Dominican Republic                                 $6,233,000,000                                    
89     Iceland                                            $6,140,000,000                                    
90     Tunisia                                            $5,699,000,000                                    
91     Bosnia and Herzegovina                             $5,370,000,000                                    
92     Mauritius                                          $5,068,000,000                                    
93     Belarus                                            $5,059,000,000                                    
94     Burma                                              $5,032,000,000                                    
95     Cote d'Ivoire                                      $4,688,000,000                                    
96     Honduras                                           $4,460,000,000                                    
97     Tanzania                                           $4,174,000,000                                    
98     Ecuador                                            $3,935,000,000                                    
99     Panama                                             $3,888,000,000                                    
100    Latvia                                             $3,595,000,000                                    
101    Ireland                                            $3,591,000,000                                    
102    Albania                                            $3,274,000,000                                    
103    Ethiopia                                           $3,147,000,000                                    
104    Slovakia                                           $3,133,000,000                                    
105    Jamaica                                            $3,100,000,000                                    
106    El Salvador                                        $3,067,000,000                                    
107    Uganda                                             $3,045,000,000                                    
108    Georgia                                            $2,945,000,000                                    
109    Macedonia                                          $2,794,000,000                                    
110    Lithuania                                          $2,602,000,000                                    
111    Nicaragua                                          $2,521,000,000                                    
112    Zambia                                             $2,426,000,000                                    
113    Kyrgyzstan                                         $2,411,000,000                                    
114    Cameroon                                           $2,357,000,000                                    
115    Moldova                                            $2,300,000,000                                    
116    Armenia                                            $2,242,000,000                                    
117    Mozambique                                         $2,193,000,000                                    
118    Bahrain                                            $2,166,000,000                                    
119    Haiti                                              $2,044,000,000                                    
120    Namibia                                            $1,949,000,000                                    
121    Papua New Guinea                                   $1,800,000,000                                    
122    Madagascar                                         $1,141,000,000                                    
123    Rwanda                                             $1,026,000,000                                    
124    Luxembourg                                         $1,000,000,000                                    
125    Laos                                               $989,800,000                                      
126    Lesotho                                            $983,000,000                                      
127    Fiji                                               $966,800,000                                      
128    Bahamas, The                                       $922,100,000                                      
129    Slovenia                                           $911,200,000                                      
130    Cyprus                                             $879,100,000                                      
131    Gabon                                              $834,900,000                                      
132    Congo, Republic of the                             $813,400,000                                      
133    Kosovo                                             $683,900,000                                      
134    Malta                                              $671,100,000                                      
135    Tajikistan                                         $642,400,000                                      
136    Malawi                                             $613,500,000                                      
137    Guyana                                             $607,700,000                                      
138    Montenegro                                         $599,600,000                                      
139    Cabo Verde                                         $589,100,000                                      
140    Palau                                              $580,900,000                                      
141    Swaziland                                          $576,600,000                                      
142    Maldives                                           $565,500,000                                      
143    Seychelles                                         $538,800,000                                      
144    Sudan                                              $504,900,000                                      
145    Congo, Democratic Republic of the                  $444,600,000                                      
146    Guinea                                             $416,100,000                                      
147    Barbados                                           $407,600,000                                      
148    Syria                                              $407,300,000                                      
149    San Marino                                         $392,000,000                                      
150    Estonia                                            $389,800,000                                      
151    Suriname                                           $381,100,000                                      
152    Zimbabwe                                           $374,000,000                                      
153    Belize                                             $368,300,000                                      
154    West Bank                                          $312,800,000                                      
155    Gaza Strip                                         $312,800,000                                      
156    Vanuatu                                            $288,900,000                                      
157    Yemen                                              $245,100,000                                      
158    Eritrea                                            $236,600,000                                      
159    Togo                                               $215,100,000                                      
160    Grenada                                            $207,700,000                                      
161    Saint Vincent and the Grenadines                   $160,000,000                                      
162    Micronesia, Federated States of                    $157,000,000                                      
163    Senegal                                            $151,800,000                                      
164    Dominica                                           $150,000,000                                      
165    Equatorial Guinea                                  $140,900,000                                      
166    Tonga                                              $131,900,000                                      
167    Samoa                                              $99,310,000                                       
168    Burundi                                            $79,300,000                                       
169    Chad                                               $74,200,000                                       
170    Sao Tome and Principe                              $64,000,000                                       
171    Benin                                              $60,200,000                                       
172    Montserrat                                         $49,360,000                                       
173    Burkina Faso                                       $45,300,000                                       
174    Somalia                                            $30,450,000                                       
175    Gambia, The                                        $22,800,000                                       
176    Kiribati                                           $7,479,000  

https://www.cia.gov/library/publications/the-world-factbook/rankorder/rawdata_2188.txt
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