THE BANK of England holds less than one per cent of the foreign currency reserves raised around the world, and a far lower share than other central banks around the world, according to research released yesterday.
A report on world financial markets by Deutsche Bank suggests that the UK had only $70bn (£42.1bn) in foreign exchange reserves as of the end of 2013, behind many smaller countries, like Denmark, Israel and Poland. In total, the reserves owned by the Bank add up to only 0.6 per cent of the world’s total.
The Peoples’ Bank of China holds by far the largest quantity of foreign reserves, with over $3 trillion and a third of the world’s total, while Japan holds over 10 per cent. The Swiss central bank also holds over four per cent of the world’s reserves, worth nearly $500bn. In comparison, the UK is 24th in the list, between the Philippines and the United Arab Emirates.
When the new framework for monetary policy was announced in 1997, former chancellor Gordon Brown gave the Bank the power to accumulate a pool of foreign exchange reserves and use them at their own discretion.