Exchange stabilization fund (ESF)

Exchange stabilization fund (ESF),

Definition of Exchange stabilization fund (ESF):

  1. The Exchange Stabilization Fund (ESF) is, predominantly, comprised of three types of financial instruments, namely the U.S. dollar (USD), foreign currencies, and special drawing rights (SDR). For instance, if the U.S. Treasury needed to intervene in the foreign exchange (FX) marketplace to influence exchange rates and promote stability in both foreign and domestic currencies, then they could do so by using the ESF.

  2. The Exchange Stabilization Fund (ESF) is an emergency reserve account that can be used by the U.S. Department of Treasury to mitigate instability in various financial sectors, including credit, securities, and foreign exchange markets.

  3. An account used by the Secretary of the Treasury of the United States (with the approval of the President) to counter instability in the various gold, credit, securities, and foreign exchange markets. This trading fund can also be used to offer short-term (bridge) loans to foreign governments and monetary authorities in the form of swaps. Transactions are typically routed through the Federal Reserve Bank of New York.

How to use Exchange stabilization fund (ESF) in a sentence?

  1. The Exchange Stabilization Fund (ESF) was created and financed by the Gold Reserve Act of 1934.
  2. The Exchange Stabilization Fund (ESF) is an emergency reserve account that can be used by the U.S. Department of Treasury to mitigate instability in various financial sectors, including credit, securities, and foreign exchange markets.
  3. The Exchange Stabilization Fund (ESF) is, predominantly, comprised of three types of financial instruments, namely the U.S. dollar (USD), foreign currencies, and special drawing rights (SDR).

Meaning of Exchange stabilization fund (ESF) & Exchange stabilization fund (ESF) Definition