Reserve Currency

A Reserve Currency is a foreign currency held in significant quantities by central banks and other monetary authorities as part of their foreign exchange reserves, primarily for use in international transactions, to manage exchange rates, and to service foreign debt. These currencies are characterized by their stability, liquidity, and widespread acceptance in global trade and finance, with the U.S. Dollar currently serving as the world's dominant reserve currency, accounting for approximately 58% of global foreign exchange reserves as of late 2023.