China and Japan Dominate Global Foreign Exchange Reserves in 2019
China and Japan hold the world's largest foreign exchange reserves, with China's reaching $3.17 trillion in 2019 and Japan's at $1.3 trillion. These reserves, crucial for international transactions and market interventions, consist of hard currencies and government securities.
Foreign exchange reserves, held by central banks or governments, are liquid assets in foreign currencies. They are vital for meeting international financial obligations and intervening in the foreign exchange market. The US dollar dominates, making up about 57.9% of global reserves.
China leads with the largest reserves, significantly more than Japan's. Their reserves include hard currencies like the US dollar, Euro, and Japanese yen, along with government securities. Following them, Switzerland, India, Russia, Saudi Arabia, South Korea, and Brazil also hold substantial reserves.
China and Japan's vast foreign exchange reserves boost their credibility in meeting international obligations and intervening in the exchange rate market. These reserves, predominantly in US dollars, play a significant role in maintaining global financial stability.
