“Brexit Threatens The Status Of Pounds”
“Brexit Threatens the Status of Pounds as a Reserve Currency.” The British departure from the European Union threatens the status of the British pound as a reserve currency, claim managers of money reserves at central banks.
Three-quarters of managers say that central banks will reduce their assets with a Brexit, according to the reports on Monday.
Central banks hold reserves in all kinds of commonly used currencies.
For example, the European Central Bank (ECB) keeps US dollars, Japanese yen and Chinese renminbi in cash.
Worldwide, central banks mainly have the dollar and the euro in cash as reserve coins,
but the pound and the Japanese yen are also still being held.
Until the prime half of the last century, the pound was even the most valuable reserve currency.
Central banks use their reserves in foreign currencies to, for example, stabilise the value of their money.
But the bankers do not like the unpredictability and volatility that the Brexit brings,
although the reserves have only slightly shrunk in pounds.