International Reserves
Categories: International, Econ
You can think of international reserves as a country’s treasure troves, with treasure being stored around the world (real treasure...not the bubbler fish tank kind).
International reserves are assets that a country has stored abroad in other countries’ central banks. They’re basically the funds that central banks pass among themselves when doing business with each other. Think: Venezuela's oil stash that allowed them to borrow way too much cash from banks around the world and basically ended up politically destroying their country.
Central banks can use international reserves to back liabilities and deposits. While this interconnectedness can help each other while things are doing great, it also makes everyone feel it more when the economy takes a plunge.
Unlike Argentina, Venezuela is, in fact, saying, "Do cry for me..."