FOREIGN RESERVE Meaning and
Definition
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The term "foreign reserve" refers to the holdings of a country's currency, as well as other foreign currencies, and various international monetary assets, that are held by the central bank or monetary authority. These reserves are primarily used to stabilize a nation's currency exchange rate, provide liquidity in times of financial crisis, and ensure economic stability.
Foreign reserves are typically acquired through various means, such as trade surpluses, foreign direct investments, overseas borrowings, grants, and aid packages. These reserves serve as a safety net, offering a buffer against external shocks, economic downturns, or speculative attacks on a nation's currency.
Governments and central banks utilize foreign reserves to intervene in currency markets, by buying or selling their own currency, in order to influence exchange rates. This intervention can help maintain the competitiveness of a country's exports or counteract excessive volatility in the foreign exchange market.
Foreign reserves are commonly held in the form of cash, bank deposits, treasury bills, government bonds, corporate bonds, and other liquid assets denominated in foreign currencies. The composition of these reserves may vary, depending on factors such as a country's export base, import requirements, monetary policy objectives, and risk appetite.
Foreign reserves play a crucial role in supporting a nation's financial stability, ensuring confidence in the domestic currency, and facilitating international transactions. Governments and central banks closely monitor and manage these reserves to mitigate risks, maintain stability, and promote economic growth.
Common Misspellings for FOREIGN RESERVE
- foreign reserved
- foreign reservee
- foreign reservew
- foreign reservs
- foreign reserve
- foreign reservse
- foreign reserves
- foreign reserve3
- foreign reserver
- doreign reserve
- coreign reserve
- voreign reserve
- goreign reserve
- toreign reserve
- roreign reserve
- fireign reserve
- fkreign reserve
- flreign reserve
- fpreign reserve
- f0reign reserve
Etymology of FOREIGN RESERVE
The word "foreign reserve" is not derived from a single etymology but is a combination of two separate words with their respective origins:
1. Foreign: The word "foreign" originated from the Latin word "foris", meaning "outside" or "beyond". It entered the English language through the Old French word "forain" in the 13th century. It refers to anything or anyone not belonging to or originating from the place being referred to.
2. Reserve: The word "reserve" comes from the Latin word "reservare", which means "to keep back" or "to preserve". It was introduced into English via Old French in the 14th century. In the context of financial terminology, "reserve" refers to a supply or amount held in reserve or saved for future use.
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