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According to simple economics, the countries hold foreign reserves for the better future health of the economy. The foreign currency reserves allow nations to stabilize their economies in-case of uncertain instability/shock.
Foreign currency reserves are a large quantity of currency that is kept by the central bank, or in some countries by major financial institutions. The financial reserves are used to pay for investments, debt, or to influence an exchange rate.
The dollar is one of the most used currencies used by nations as foreign reserves, followed by Euro and Chinese renminbi. Here are 10 countries of the Middle East with the most foreign exchange reserves:
With the foreign reserves toppling to $509.57 billion, Saudi Arabia tops our chart. In the middle east, it holds the 1st rank, while in the world it holds the 8th rank.
According to the official report by the Israeli government, it holds FX reserves of worth $115.27 billion. Most of the central bank holdings are in terms of government assets (which constitute of 63.4 percent), followed by equities, corporate bonds, long term bonds of other public entities, and short-term assets.
The Central Bank of the UAE reported that it held FX reserves of $99.5 billion. The interest rate would be lowered by 25 basic points.
Even though Libya is going through an economic crisis, it held $585.34 billion as FX reserves. But now the state bank reports that with the current economic disaster, it is at a verge of ending its foreign exchange reserves.
The Central Bank of Iraq notified that it held FX reserves of $64.56 billion which have increased by 32.6% since the end of 2018. The country holds gold reserves of 96 tons.
The Long-term foreign currency of Lebanon was recently downgraded by Fitch Ratings to CCC. This was because the economy suffered from one of the worst and heaviest public debt in the world. The country is using its FX reserves, which are believed to be sufficient as they are amounted to be $52.38 billion.
Holding FX reserves of worth $41.84 billion, now the economy has decided to stop exhausting them as they were being used for undergoing difficult economic reforms introduced by the former president Hosni Mubarak in January 2011.
The Kuwaiti FX reserves which are worth $ 40.28 billion consists of cash, gold, and currency and deposits yet the assets of Public Investment Authority are not included in them.
The central bank of Qatar has increased its share of FX reserves since 2017 and has been doubling throughout 2018. It has a worth of $30.36 billion.
According to the Moroccan central bank, the FX reserves of worth $24.46 billion are equivalent to five months of imports.
Source: Al Arabiya