Foreign exchange reserve management

Abstract

A portfolio manager cannot work in isolation. He needs to work with other analysts from other areas of the world so as to have a wider view, as no one has a formula of what is going to happen. Consequently, the reserve manager must keep himself updated, with the available information and adequate equipment. He must share opinions and ideas, especially during the daily dealer's morning meeting. No one for instance, is going to tell you if a particular currency is going to appreciate or depreciate. Since there are many reserves and a high degree of risk, every Central Bank must carefully decide when, where, with whom and in what instruments reserves should be invested. All this is RESERVE MANAGEMENT!