reserve currency (C1)
noun phrase
Pronunciation: rɪˈzɜːrv ˈkʌrənsi
Definition
A foreign currency held in significant quantities by central banks and other major financial institutions as a key component of their foreign exchange reserves.
Examples
The US dollar and the Euro are the most common reserve currencies in the world.
Holding a reserve currency allows countries to settle international debts and influence their exchange rate.
The stability and widespread acceptance of a currency are crucial for it to be considered a reserve currency.
How to Use reserve currency
- hold as reserve currency (collocation)
- To keep a particular currency in significant amounts as part of foreign exchange reserves. — "Many countries hold the US dollar as a reserve currency due to its stability."
- become a reserve currency (collocation)
- For a currency to gain widespread acceptance and use by central banks as a primary foreign exchange reserve. — "The Euro has been vying to become a more dominant reserve currency."
- use as reserve currency (collocation)
- To employ a specific currency for the purpose of foreign exchange reserves. — "Central banks often use a basket of currencies as reserve currency."
Synonyms of reserve currency
Words with a similar meaning to reserve currency:
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