They are creditor’s rights held by the administrative authorities (central banks, monetary authorities, foreign exchange stabilization funds, and the Ministry of Finance) in the form of bank deposits, Treasury bills, and long-term and short-term government securities that can be used at a time.
Including foreign currency, foreign currency deposits, foreign currency securities (government bonds, Treasury bills, corporate bonds, stocks, etc.), foreign currency payment certificates (bills, bank deposit certificates, postal savings certificates, etc.).
Foreign exchange has broad and narrow sense.
Broadly defined, all assets owned by a country that are expressed in foreign currency.
It refers to the flow of money between countries and the currency of one country into the currency of another country, in order to pay off international creditor’s rights, debt relations of a specialized business activities.
In fact, it is a bond held by the monetary authority in the form of bank deposits, Treasury bills, and short-term government bonds that can be used in case of a balance of payments deficit.
In the narrow sense, foreign exchange expressed in foreign currency is generally accepted by all countries and can be used for the settlement of international claims and debts.
There must be three characteristics: affordability, accessibility and exchangeability.
