Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
Why Central Banks Keep Their Reserves in Other People's Currencies
Why do central banks hold trillions in foreign currencies like the dollar, euro, and yen? In this episode, Lucas and Luna unpack the mechanics and the motives: from trade settlement and import cover to the subtle power of 'exorbitant privilege' and the quiet costs of holding someone else's money. Using the People's Bank of China's massive dollar pile and the European Central Bank's yuan purchases as real-world anchors, they walk through how reserve currencies get chosen, why gold is making a comeback, and what a shift toward 'multi-polar' reserves might…
The skinny
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