Why central banks need more reserve currencies Ousmene Jacques Mandeng

摘要

The ongoing credit and capital market crisis has served as a reminder that markets in distress stop functioning normally. The gyrations of US treasury bill and note yields show there may not be a market at the expected price when needed. This affects all market participants, but particularly central banks. Central banks hold foreign exchange reserves to provide liquidity to foreign exchange markets and, for that purpose, are invested mostly in a narrow portfolio of US treasury bills and notes. Total reserves now stand at about $7000bn, most of which is held by emerging markets central banks. In fact, today the official sector owns more than 40% of all marketable US treasury securities, compared with less than 20% in 2000.