Template on international reserves and foreign currency liquidity

Background

The "Eurosystem" templates contain aggregated data on the international reserves and foreign currency liquidity of the euro area Member States that had adopted the euro at the time to which the template refers and of the ECB.

A booklet on the "Statistical treatment of the Eurosystem's international reserves" is available (download:  pdf 340 kb, en).

Section I.A of the template encompasses official reserve assets. In line with the recommendations in the 5th Edition of the IMF Balance of Payments Manual, reserve assets of the euro area are highly liquid, marketable and creditworthy claims held by the ECB ("pooled reserves") and the participating NCBs ("unpooled reserve assets") on non-residents of the euro area and denominated in foreign currency (i.e. in currencies other than the euro), plus gold, reserve positions in the IMF and SDR holdings.

Section I.B covers other assets of the ECB and the participating NCBs denominated in foreign currency and readily available upon demand but not included in the category of official reserve assets (i.e. foreign currency claims on residents of the euro area).

Sections II and III encompass, respectively, predetermined and contingent short-term liabilities, and claims not liquid enough to be considered in section I. They comprise financial instruments denominated in foreign currency and with a remaining maturity below one year; the residency of the counterpart is not relevant.

Section IV comprises additional information deemed relevant for assessing risk exposure in foreign exchange, but not covered in sections I-III. Additional details on instruments disclosed in the preceding sections are also presented. A currency split between the external reserves denominated in currencies included in the SDR basket (USD, JPY, EUR and GBP) and those denominated in other currencies is published quarterly, with a four-month delay after the reference period. In addition, the details of the currency composition of the ECB's reserve assets are published annually for the end-year data at the end of April.

Valuation:

Instruments in section I (I.A and I.B) are valued on the basis of market prices. Holdings of reserve assets, including gold, should be valued using closing mid-market prices at the end of the appropriate period and converted into euro using the closing mid-market exchange rates prevailing on the last day of the reference period. Current practice in the euro area is to perform a full market valuation at least quarterly (including the calculation of the accrued interest) but with a monthly conversion into euro (using end-month exchange rates) to reflect movements in foreign exchange rates. Sections II and III show foreign exchange commitments which could or will certainly give rise to receipts and payments in the coming year when the relevant contracts mature. In section IV, both nominal values and market values are used, as specified in the heading of each sub-category.

These valuation practices are consistent with international statistical standards and, hence, are not fully coincident with accounting valuation rules.

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Classifications:

The methodology applied conforms to the guidelines provided by the IMF for the implementation of the template on international reserves and foreign currency liquidity, with the exception of the treatment of claims arising from reverse repos vis-à-vis NCBs or private financial institutions, which are classified under currency and deposits instead of under other reserve assets.

Regarding other specific items in section I.A, holdings of monetary gold remain unchanged in all reversible gold transactions (gold swaps, repos, loans and deposits).

In accordance with IMF's guidelines, claims on the IMF arising from IMF financing under the New Arrangements to Borrow (NAB) and the General Arrangements to Borrow (GAB) are classified under Reserve position in the IMF, whereas claims arising from the use of the IMF's ESAF Trust Loan Account are recorded under Foreign exchange/Currency and deposits. Countries' commitments to the IMF's ESAF Trust Loan Account not yet drawn are not reported in Section III of the template.

Foreign-currency-denominated securities repo transactions (including repos, securities lending and sell-buy-back transactions) are treated as collateralised loans in line with international statistical standards.

Deposits and loans are classified according to the economic nature of the counterpart. Transactions in which the counterpart is an NCB or any other financial institution are recorded as foreign exchange/currency and deposits, while they are classified as loans in the case of all other counterparts and recorded under other claims. In this context, the term "financial institution" should be understood in a broad sense, encompassing any type of counterpart of a financial nature.

Asset and liability positions in financial derivatives falling into the category of official reserve assets are netted out and classified under Reserve assets/Other claims. Assets and liabilities are not recorded separately.

Finally, the short and long positions in forwards and futures in foreign currency, which are included in Section II of the ECB template, comprise both cross currency transactions and transaction vis-à-vis the euro.

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