The Official Reserve Account
The official reserve account, a subdivision of the capital account, is the foreign currency and securities held by the government, usually by its central bank, and is used to balance the payments from year to year. In the United States, the New York Federal Reserve serves as the Treasury's fiscal agent. The official reserves increases when there is a trade surplus and decreases when there is a deficit. Sometimes the central bank will use it to attempt to change the exchange rate to what the government perceives as more favorable.
The official reserve account, a subdivision of the capital account, is the foreign currency and securities held by the government, usually by its central bank, and is used to balance the payments from year to year. In the United States, the New York Federal Reserve serves as the Treasury's fiscal agent. The official reserves increases when there is a trade surplus and decreases when there is a deficit. Sometimes the central bank will use it to attempt to change the exchange rate to what the government perceives as more favorable.
