The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Foreign Exchange Reserve Management

  • Claudio Borio
Reference work entry


Foreign exchange reserve management refers narrowly to the allocation of foreign exchange reserves across currencies, asset classes and instruments. Reserve management practices have evolved substantially over the first decade of the twenty-first century, with a tendency for processes to converge to those in the private asset management industry. There has been a greater tendency to focus on return, a more structured allocation process, and a greater focus on risk management, including reputational as well as pure financial risks. Decisions on the currencies in which to hold reserves and to designate as numeraire (currency of account) are also receiving increasing attention.


Currency Foreign exchange Reserve management Portfolio management Numeraire 

JEL Classifications

E58 F30 F31 G11 G15 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Claudio Borio
    • 1
  1. 1.