Great note, thanks Daniel. Question please: are the USD "FX reserves" held as assets on the balance sheet of the CBR liabilities of US (and foreign) commercial banks, or are they liabilities of the US Fed? If the latter, what form do they take? They aren't the same "central bank reserves" that the Fed uses to settle interbank payments or manage QE, are they? Thanks.
Thanks. But Zoltan's note says "...The data show a substantial increase in Russia’s
claims on foreign central banks after it sold U.S. Treasuries, [...] For central banks, these are typically deposits at other central banks. Figure 3 shows the big increase in the Bank of Russia’s claims on foreign central banks...".
That's true, but I think there he's talking about holding non-dollar assets as collateral in FX swap transactions. Further up, Zoltan says "FX reserves are still in dollars, but not onshore. They are offshore in the Eurodollar market."
Great note, thanks Daniel. Question please: are the USD "FX reserves" held as assets on the balance sheet of the CBR liabilities of US (and foreign) commercial banks, or are they liabilities of the US Fed? If the latter, what form do they take? They aren't the same "central bank reserves" that the Fed uses to settle interbank payments or manage QE, are they? Thanks.
As I understand it, they are in various forms in the commercial banks, and no they are not on deposit at the Fed. I am sending people to Zoltan for more details: https://plus2.credit-suisse.com/content/credit-suisse-research/us/en/shorturlpdf.html?v=4ZcV-a56j-V
Thanks. But Zoltan's note says "...The data show a substantial increase in Russia’s
claims on foreign central banks after it sold U.S. Treasuries, [...] For central banks, these are typically deposits at other central banks. Figure 3 shows the big increase in the Bank of Russia’s claims on foreign central banks...".
That's true, but I think there he's talking about holding non-dollar assets as collateral in FX swap transactions. Further up, Zoltan says "FX reserves are still in dollars, but not onshore. They are offshore in the Eurodollar market."
if they are US treasury securities I believe they are held in the book entry system at the Fed
https://www.treasurydirect.gov/instit/auctfund/held/cbes/cbes.htm