What Are Official Reserve Assets,and Why Are They Important to Countries

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The Answer is Reserve assets are mainly the currencies of the largest and most stable economies in the world: U.S.dollars,European Union (EU)euros,British pounds,the Japanese yen,and recently the Chinese yuan,as well as monetary gold and SDRs.All forms of international debts can be settled with reserve assets.When a country runs low on reserve assets,it signals that potentially serious problems are arising.In particular,the country may not be able to pay international debts,and it may harm import businesses if the central bank cannot provide a key currency required for payment of import goods.

What Are Official Reserve Assets,and Why Are They Important to Countries

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