Discover how to efficiently protect the budget FX rate with our guide to market-based cash flow hedging programs

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Reserve Currency

A reserve currency is a currency that central banks hold as part of their foreign exchange reserves. This currency is often used for their international transactions. There are several features of an international reserve currency: a large transaction area, stable monetary policy, absence of controls, a strong central state, some significant backing in terms of precious metals, a sense of permanence, and low interest rates.