I think I more or less understand the importance of gold and foreign currency reserves for maintaining economic stability and attractiveness to investors, as well as for strengthening currency and (in the case of gold) hedging against inflation. But why do Eurozone countries still hold them, even though they no longer have their own national currency? I apologize if my question sounds ignorant or stupid, but why didn't Italy or Germany sell their gold and foreign currency reserves after adopting the euro? Is it to avoid weakening the euro? But isn't it true that eg. most of Germany's gold and foreign currencies belong to the German Central Bank, not the ECB, and therefore their sale would have no direct impact on the euro currency? What are the benefits of keeping them for Germany as a country? I have not found any answer that would explain the role of reserves in relation to individual Eurozone countries.

    Why Eurozone countries still keep their gold and other reserves even though they no longer have a national currency?
    byu/bartek6500 inAskEconomics



    Posted by bartek6500

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