Foreign reserve

money held by a central bank to pay debts, if needed

A foreign reserve is the currency from another nation that is held by a nation's treasury. They are another set of assets in a country. Formerly, only gold and silver were used as reserves, but now the currency of other countries is used. There is a benefit to having a foreign reserve. When a nation has one, it can change the exchange rate to make it best for the country. But sometimes the exchange rate drops and the foreign reserve becomes worthless.

Other websites

change