Foreign exchange reserves are not only used to back liabilities but also influence monetary policy. In 2020, during the covid-19 pandemic, governments from Belize to Zambia dipped into their cash and gold reserves, with Turkey using up half its reserves. Going to analyze the nations that have had the largest positive variation in the last week/month, at the first place in this case we find Japan. Japan, which in the last period had a positive variation of +37.780 million dollars.

Switzerland, the land of the Alps, has a total foreign exchange of about $545.96 billion. Another danger of using gold as a reserve is that the asset is only worth what someone else is willing to pay for it. During an economic crash, that would put the power of determining the value of the gold reserve, and therefore Russia’s financial fallback, into the hands of the entity willing to purchase it. China began reducing its forex reserves in July 2014 over concerns that the forex reserve level was too high. In January 2017, Chinese forex reserves dipped below $3 trillion briefly and have since remained above that level. The Republic of South Korea in many matters has made commendable progress.

What are the top nations in the world with the most reserves, including gold, in dollars? At $3,360,000,000,000 the Asian nation ranks first globally for this metric. Compared to only 18 years ago (2012), China has increased the value of reserves by 10 times from about 360 billion to the current value. In second place among the nations with the most reserves is another Asian nation.

In second place we find China with +37.128 million and in third place Brazil, 11th at the level of foreing exchange reserves, with a figure of +14.724. The U.S. doesn’t have the highest foreign reserves in the world, with the reserves declining for around a decade now. This isn’t due to government intervention but due to an appreciating dollar, especially in the last year.

If their national currency becomes insolvent or rapidly devalues, that country still has assets that can be used for necessary purchases, trading with other governments and so on. To determine the countries with the largest foreign reserves in 2023 by country, we determined the holdings of each country via information from their central bank. Where the foreign reserves by country have been denominated in the country’s local currency, we have converted them to the U.S. dollar for uniform comparison. The data is based on the latest available information from each country, generally either in July, August, September or October 2023. Foreign exchange reserves are assets held on reserve by a central bank in foreign currencies. These reserves are used to back liabilities and influence monetary policy.

  1. The SDR is regarded as an asset which can be exchanged for other currencies when needed, and only IMF members, and the IMF itself can hold SDRs.
  2. Brazil’s central bank, Banco Central do Brasil, holds forex reserves for transaction and precautionary purposes, to protect one of the world’s largest economies and the biggest economy in Latin America from external shocks.
  3. Saudi Arabia also holds considerable foreign exchange reserves, as the country relies mainly on the export of its vast oil reserves.
  4. The Indian economy stands at the tenth number and has the third-largest purchasing parity in the world.

The country’s total foreign reserves are at $3726 billion thus topping the list in highest Forex reserves. China is regarded as one of the biggest and fastest economies developing day by day. It has the second-largest of the world’s GDP and very high purchasing capacity. Saudi Arabia also holds considerable foreign exchange reserves, as the country relies mainly on the export of its vast oil reserves.

With forex reserves worth over $600 billion, Russia has the fourth largest forex reserves in the world. Hong Kong has forex reserves worth over $504 billion, seventh largest in the world as per 2022 data. South Korea’s forex reserves are worth over $449 billion, making it the ninth country with the largest forex reserves in the world as of 2022. As of 2022, international reserves in China was 3,306,839 million US dollars that accounts for 23.75% of the world’s international reserves.

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It includes any foreign money held by a central bank, such as the U.S. Foreign currency reserves can also be used to control exchange rates, which in turn affects global trade. If a currency, whether fixed or floating, begins to deviate from its desired rate with a foreign currency, the central bank can buy and sell reserves as needed to restore the intended exchange rate. The International Monetary Fund, also has a reserve currency list, called the Special Drawing Rights (SDR).

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Disastrous monetary policies amid political turbulence led to the pound sterling falling heavily in 2022, and in September reached its lowest-ever level against the U.S. dollar, though it has recovered somewhat since. Taiwan though claimed by China has impressive foreign exchange independently with quite impressive figures that are $424.24 billion. It is also ranked among the top 20 of the world’s most powerful countries economically.

Monthly forex reserves in 84 countries and territories worldwide 2023

The top 15 worldwide also include, for example, Saudi Arabia, Korea, Singapore and Brazil. The top 15 is rounded off by a number of nations that are members of the European Union. A value that even if multiplied by 15 does not reach the figure for China. Russian reserves are the world’s fifth largest; They have reached a level of $600 https://1investing.in/ billion on 21 May 2021. They were the third country to reach $500 billion.[104] The first fall in reserves was due to the Great Recession, the second fall in 2015 was due to falling oil prices. Thanks to its massive oil industry, the de facto OPEC leader boasts $451 billion in its forex reserves, the eighth largest in the world.

The SDR itself is not a currency but a combination of a basket of some of the top currencies in the world including USD, euro, China’s renminbi, pound sterling and the Japanese yen. The SDR is regarded as an asset which can be exchanged for other currencies when needed, and only IMF members, and the IMF itself top 10 foreign reserve country can hold SDRs. Unsurprisingly, all the countries which form the weightage of SDRs are also among the list of countries with the largest foreign reserves in 2023. Not having significant foreign reserves can come back to haunt a country especially in times of an economic crisis, as witnessed by Sri Lanka.

Singapore is among the countries with the largest foreign reserves in 2023 to enable it to maintain an exchange rate centered policy. Saudi Arabia is an oil-rich country and stands in the third position with immense foreign exchange reserves of about $733.66 billion. Saudi Arabia has said to have gained about 730 billion dollars from oil export only.

Its huge reserves constitute a large amount of foreign direct investment, commendable and gigantic trade ratios, immense foreign loans, and RM B appreciation. It is also a member of WTO and is gaining the full benefit of that. Its reserves are slowly increasing and are expected to rise after negotiations between China and Taiwan on trade agreements. Sri Lanka and Lebanon are other countries that have been severely impacted by economic catastrophes, including unstable food systems and effects of the war in Ukraine. Pakistan’s reserves, meanwhile, have fallen to an eight-year low due to the pandemic, rising inflation, and a weakened rupee. Pakistan also suffered from catastrophic floods that amounted to more than $30 billion of losses in the country in 2022.

Saudi Arabia increasing its foreign reserves reflect on the country’s ability to support its economy and manage its currency while protecting the economy from external shocks. Amid its war with Gaza, Israel’s central bank sold $30 billion of foreign reserves to support the Israeli shekel. Between September to October, Israel’s foreign reserves have fallen by $7 billion. India’s growth in the last few years, its technological advancements, it’s its sector, and its foreign reserve rates have been applauding able. The Indian economy stands at the tenth number and has the third-largest purchasing parity in the world.

A country is regarded as developed or economically strong if contains the highest foreign exchange reserves with the lowest debts and foreign investment and high currency rate concerning much stability in its currency comparable to dollars. Here is the list of the top ten countries with the highest foreign exchange reserves or for ex-lets take a look at them. Switzerland has the third-largest forex reserves in the world, worth about $1 trillion as of 2022.

On the other end of the spectrum, countries with the smallest cash and gold reserves include Burundi, Samoa, and many other island-states. Dominica has the least amount of reserves, valued at $190.8 million. Island-states and other poorer countries are disproportionately affected by climate change and health emergencies, with little to no financial capability to address those issues.