Reserve Asset

A reserve asset is an asset which is held by a central bank or a government monetary authority and for which there is an international demand.

Typically, reserve assets consist of commodities (like gold or other precious metals) and liquid currencies (like the U.S. dollar) which can easily be redeemed for international purchases of goods and services.

Reserve assets facilitate trade between countries by guaranteeing settlement of payments for goods and services in a form which keeps its value across borders.

The Swiss National Bank publishes inventories of Swiss reserve assets on a monthly basis. Switzerland’s reserve assets are highly diversified, comprising of foreign currency reserves both in cash and securities, gold bullion, deposits at foreign central banks, deposits at Swiss and foreign commercial banks, special drawing rights, deposits with the International Monetary Fund (IMF) and derivatives.

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