Trends in the accumulation of net foreign reserves since World War II

Abstract. Taking a historical perspective, this paper observes the trend in net foreign reserves by examining data that extend as far back as 1948. It looks broadly at how reserve coverage has changed over time and the benefits and costs of holding such reserves. Moreover, it studies which countries are the biggest holders of reserves and how much they have as well as the reasons why they hold these amounts. An accompanying spreadsheet workbook contains the data for the graphs and analysis of this paper. Data come mainly from the International Monetary Fund’s International Financial Statistics database, supplemented in some cases by national sources.Keywords. Foreign reserves, Gold, Monetary base, Imports, Reserve adequacy.JEL. E58, F31