Reserves of foreign currency provide a small return in interest.

Gold and foreign currency reserves are increasing, implying appreciation of the ruble.

It has paid off its foreign debt and built up foreign currency reserves of 450 billion.

Indeed, in September alone, China s foreign currency reserves increased by almost 100 billion compared to August.

By contrast, less developed countries that borrow in foreign currencies may run out of currency reserves.

He built up enormous foreign currency reserves, which cushioned the blow of the 2008 global economic crisis.

To preserve its precious foreign currency reserves, Egypt needs the US and its allies to provide foodstuffs.

Since the amount of foreign reserves available to defend a weak currency (a currency in low demand) is limited, a currency crisis or devaluation could be the end result.

But there are some big differences between then and now. Most developing countries have accumulated massive foreign currency reserves.

Latin America will finish 2007 with a current account surplus and growing foreign currency reserves, insulating them from financial crisis.

The difference, which banks offset through transactions in the inter bank currency market, has a significant impact on China s foreign exchange reserves, but is not equivalent to the net change in foreign exchange reserves during the same period.

By plowing more than two thirds of its mammoth foreign currency reserves into US dollar denominated assets, China has gained significant political leverage.

Then, crisis erupted in May, when the country ran low on foreign currency reserves and traders could not purchase the dollars they needed.

Worse still, they have had to adopt strategies such as currency intervention and accumulation of foreign exchange reserves that export financial instability to others.

And they certainly don t want to be pressed to apologize for holding hostage over 800 billion in foreign currency reserves, acquired to resist yen appreciation.

To reduce the strain put on India's foreign reserves by gold smuggling caused by this external use of the rupee, a separate currency was created.

The country has plowed some of its oil money into increasing its contributions to the BEAC, and now reportedly provides 48 of CEMAC s foreign currency reserves.

Fortunately, a combination of flexible exchange rates, strong international reserves, better monetary regimes, and a shift away from foreign currency debt provides some measure of protection.

Until recently, Russia has pursued an admirably conservative macroeconomic policy, running up huge budget and current account surpluses. It has paid off its foreign debt and built up foreign currency reserves of 450 billion.

Consider first the claim that the dollar s status as a reserve currency protects it, because governments around the world need to hold dollars as foreign exchange reserves.

Japan, with a surplus of saving, a strong currency, massive foreign exchange reserves, and factories without domestic orders, should take the lead in providing this funding for infrastructure.

But, while government officials do not deny that sanctions worry them, they point to Iran s high foreign currency reserves and the Iranians creativity in coping with the effects.

While emerging market countries public sector balance sheets are stronger than ever with low deficits and debt accompanied by large foreign currency reserves household and corporate leverage have risen.

After all, central banks seeking to accumulate foreign currency reserves will have alternatives to acquiring dollars, so foreigners won t give America so much rope with which to hang itself.

Then there is the destruction of Venezuelan industry, the spectacular increase in violence, the explosion of foreign debt, and the depletion of foreign currency reserves that has accompanied Chávez s so called Bolivarian socialism of the twenty first century.

These countries need to allow greater exchange rate flexibility and currency appreciation to reduce their external surpluses and thus the need to accumulate huge foreign reserves in the first place.

In response, central banks may intervene in currency markets to prevent appreciation, at the cost of accumulating low yield foreign reserves and diverting themselves from their primary goal of price stability.

The Chinese have 2 trillion in hard currency reserves to back up their promise.

Back then, China bought US Treasury bonds to keep the currency from rising and eroding the competitiveness of Chinese exporters. As a result, it accumulated an astounding 4 trillion of foreign reserves.

Official foreign exchange reserves will soon reach US 2 trillion.

As a result of these efforts, the renminbi has emerged as the second most used currency in trade finance, overtaking the euro, and the fifth most used for international payments. Moreover, it is increasingly preferred in currency market transactions and official foreign exchange reserves.

Emergency support from a few friendly governments has so far limited the erosion of Egypt s foreign currency reserves at a time of mediocre tourism earnings and growing imports of food and other basic necessities.

With China running a seemingly perpetual external surplus, foreign currency reserves have continued to mount even during the global economic crisis, with net growth reaching 140 billion in the third quarter of this year.

Eight years of 7 average annual GDP growth during Putin s previous presidency (2000 2008) allowed Russia to repay its debts, accumulate almost 600 billion in foreign currency reserves, and join the leading emerging economies.

Ten years after the common currency s introduction, the 16 member euro zone has the world s second most important currency, accounting for more than a quarter of all central banks foreign exchange reserves and having overtaken the dollar as the currency of choice for international bond issues.

Emerging markets need foreign currency and, therefore, external support.

Venezuela blocks Bitcoin sites in crusade against foreign currency

Oil export earnings allowed Russia to increase its foreign reserves from 12 billion in 1999 to 597.3 billion on 1 August 2008, the third largest foreign exchange reserves in the world.

And, although China is aggressively promoting international use of the renminbi in trade settlements, it has a long way to go before its currency is attractive as a vehicle for foreign investment and holding reserves.

PALO ALTO Since World War II s end, the US dollar has been used to invoice most global trade, serving as the intermediary currency for clearing international payments among banks and dominating official foreign exchange reserves.

Artificially low exchange rates, restrictions on capital flows, and excessively large currency reserves all create global imbalances.

b Total public debt denominated in pesos and foreign currency.

More appalling is the fact that France guarantees the CFA franc s free convertibility into hard currency, originally on the condition that all 15 Franc Zone countries surrender 100 of their foreign reserves to the French Treasury.

The problem is that foreign holdings of dollar securities are no longer primarily foreign exchange reserves in the traditional sense.

Their surpluses have turned into deficits, and their sovereign wealth funds and currency reserves have suffered major losses.