====== Reserve Currency ======
[[dido:public:ra:xapend:xapend.a_glossary:start| Return to Glossary ]]

A **Reserve Currency** is a large quantity of currency maintained by central banks and other major financial institutions to prepare for investments, transactions, and international debt obligations, or to influence their domestic exchange rate. A large percentage of commodities, such as gold and oil, are priced in the **Reserve Currency**, causing other countries to hold this currency to pay for these goods.

  * A **Reserve Currency** is a large amount of currency held by central banks and major financial institutions to use for international transactions.
  * A **Reserve Currency** reduces exchange rate risk since there's no need for a country to exchange its currency for the reserve currency to do trade.
  * **Reserve Currency** helps facilitate global transactions, including investments and international debt obligations.
  * A large percentage of commodities are priced in the reserve currency, causing countries to hold this currency to pay for these goods.

Source: [[https://www.investopedia.com/terms/r/reservecurrency.asp ]]


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