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INTERNATIONAL RESERVES

International reserves are any kind of reserve funds that can be passed between the central banks

of different countries. International reserves are an acceptable form of payment between these

banks.

The reserves themselves can either be gold or else a specific currency, such as the dollar or euro.

International reserves are also used by countries to

back liabilities such as any local currency that has

been issued as well as bank deposits. Special drawing

rights are another form of international reserves. It

was created by the International Monetary Fund to

supplement the existing reserves of member

countries.

A measurement of a bank's reserves that is equal to the difference between borrowed reserves

and excess reserves. This is the amount which the bank has available to lend to clients. A bank is

required by federal law to hold a specific amount of reserves at any given time. The excess

reserves are calculated by subtracting the required reserves from the total reserves it holds

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