Central bank reserves - Which countries are best prepared for economic crises?
Central bank reserves are considered essential for global economic stability, as they help countries meet their balance of payments obligations and serve as a hedge against economic or geopolitical shocks.
The ten countries with the largest reserves together hold $9.4 trillion in currency and gold, more than 60% of the world's total. Data from The World Factbook shows the value of reserves held by the world's central banks as of the end of 2024.
China tops the list with $3.5 trillion in foreign exchange and gold reserves, far more than any other country. Analysts say this is a result of China’s trade surpluses, as more foreign currency is coming into the country than is going out. To prevent the yuan from rapidly appreciating, the People’s Bank of China intervenes in the foreign exchange market and buys other currencies, thereby increasing the money supply and potentially fueling inflation. To counter these inflationary pressures, China uses a strategy known as sterilisation, which involves implementing monetary measures that are the opposite of the initial intervention.
Japan ranks second with $1.2 trillion, followed by the United States ($910 billion). Switzerland is surprisingly fourth, with $909 billion in reserves.
After the global financial crisis of 2008, demand for the Swiss franc increased significantly, as the currency was seen as a safe haven. This led to strong pressure to strengthen the franc. To prevent deflation and excessive strengthening of the currency, the Swiss National Bank bought large amounts of foreign currency, which slowed the growth of the franc, but significantly increased foreign exchange reserves.
In fifth place we find India ($643 billion), followed by Russia, Saudi Arabia, Hong Kong and South Korea. While Singapore closes the top ten with $383 billion in reserves.
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