By Max Clarke
The Government has this month increased the nation’s international reserves holdings. The liquid financial assets, consisting of gold, foreign currencies and IMF reserves are safeguarded by the treasury to make possible interventions to support sterling.
Net reserves were increased by 3.8% to £25.7 billion ($42.8 bn)- a sum of £1.67 billion. Total gross reserves rose by just over US$ 5 billion, reacing $90.5 bn.
Administered since 1932 by the bank of England’s Exchange Equalisation Account (EEA), the reserves are held for use in the case of specific interventions as a result of shocks to the pound. No such interventions have occurred since 1992’s ‘Black Wednesday’ when its sliding value contributed to a loss of some £3.4 billion in value to the UK economy.