Foreign currencies are an important part of the economy of any country. Especially during economic uncertainties, a country needs foreign currencies handy.

Yet, how big are the foreign currencies reserves of the most influential countries? In this article, we have listed our Top 8 Countries with the Largest Forex Reserves.

Most of the countries in the world try to build their foreign-exchange reserves. It is very important to sign of a country’s economic fitness.

Forex reserves provide a nation to have liquidity as a financial backup.

They also make the country attractive to foreign investors, which allows a country to manage inflation and keep the local currency value at a fixed rate.

In our previous article, we listed the top 10 Forex pairs to trade, but following the FX pairs let’s have a look at the countries with the largest FX reserves in the world.

Interestingly, most of the countries with the highest Forex reserves are export-oriented countries. Before we dive into the top 8 countries.

What is the Export-Oriented Economy?

Export-oriented economies tend to accumulate a lot of foreign currency reserves. If a country continues huge piles of external currency, it is in a more powerful position to influence on international markets.

In any international conflict or dispute, they have the power to negotiate or force. In addition to that, export-oriented economies also put an impact on geopolitical matters.

For example, the US-China trade conflict is the biggest story of trade conflicts now as we can see that both of the countries are economic giants of the world and are export-oriented. 

However, the export-oriented economy always tries to keep its currency value lower to have a better value in making transactions.

What are Foreign Currencies?

Largest Forex

Central Banks hold the forex reserves mostly in every country. The reserves shift regularly based on money exchange rates, global businesses, and other factors.

The International Monetary Fund (IMF) describes foreign preserves as external assets of a country. 

A country’s financial authority can practice Foreign Currency to reach the balance of wages financing needs, affect exchange rates of the currency in the Forex market and other related objects.

Most countries hold the huge majority of their international currency reserves in USD and Euros. Foreign Currency reserves work as a war chest during the economic crisis or war to defend against notional charges on the national money.

Russia holds substantial foreign currency stocks, is a good example. In 2014, the USA and the EU forced economic penalties on Russia due to its involvement in the conflict of Ukraine.

This made a 50% drop in crude oil, as Russia the world’s largest oil exporters. 

Therefore, the ruble slid 40% against the dollar in 2014. However, the result could have been far more serious If Russia intervenes in the foreign exchange demands to prop up the Russian ruble.

The ruble then strengthened between 2015 to 2018 as the legislative situation in Ukraine has been solved. Additionally, potential sanctions to the poisoning of former Russian double agent Sergei Skripal could have further effect as Robert Simpson of Insight Investments said:

“The Russian economy has adapted to the post-sanctions environment and is less dependent on foreign goods or flows than a few years ago.”

Which Country Has the Largest Forex Reserve?

There are more than 200 nations in the world, but there are a few countries that dominate the whole world. 

As we know the most of the foreign exchange reserves of the world are dominated by some countries that include China, India, Russia, and others.



Let’s have a look one by one of them.

#1 China

It is the world’s largest export-oriented country. Its substantial exports and trade surplus has helped it produce the world’s largest currency reserve. 

Central Bank of China holds the nation’s Foreign exchange reserves and announces the total sum of the reserves regularly.

 As of November 2019, it held $3.09 trillion in foreign currency reserves, which is biggest than any other country.

Many economic analysts have expressed concerns about the People’s Republic of China’s “extensive” Foreign exchange holdings. 

However, The US Defense Department stated that this would have limited effect and likely would do more damage to China than to the United States.

#2 Japan

The Japanese yen (JPY) is the world’s third popular Foreign currency, before the US Dollar and Euro. 

Japan is an export-oriented economy, giving more than $650 billion quality of goods to other nations each year.

In Japan, the Bank of Japan holds or controls the Foreign Exchange Reserves. The reserves are basically made of gold or a specific currency. 

It also has special drawing rights and marketable securities created from foreign currencies like Government Bond, treasury bills, and equities and foreign currency loans.

According to the IMF, the Bank of Japan Holds $1.317 trillion Forex reserves as of November 2019.

#3 Switzerland


Switzerland has the world’s third-largest Foreign Currency reserves. 

According to the IMF, it holds approximately $846.62 billion in Forex reserves. Switzerland is the only European nation that is featured here. However, Switzerland is not the part of the European Union anymore.

So the Swiss franc becomes safe-haven money for European investors.

#4 Russia

The Russian Federation holds $549.8 billion in forex reserves as of December 2019. 

Russia is also an export-oriented economy which is a major supplier of oil, and metals. In addition to that, The RBA is one of the world’s largest collectors of gold.

#5 Saudi Arabia

It has made the fortune to have the fifth biggest foreign currency reserves as oil and natural gas exports. 

Saudi Arabia is the world’s largest generators and exporters of oil. 

Therefore, the economy of Saudi Arabia mostly depends on Natural resources. It has $489.26 billion in forex reserves. 

However, the kingdom is making some fundamental modifications to its economy to provide for the post-oil age.

#6 Taiwan

It is this unpredicThis country is an island nation near China. It is also an export-driven economy. 

This country holds $474.5 billion in foreign currency reserves, one of the biggest in the world. 

There are several electric giant companies in Taiwan, like Foxconn, Asus, Acer, and HTC.

#7 India

Largest Forex

India, the country holds $454.94 billion in Foreign Currency reserves. Domestic consumption mostly drive the Indian economy. 

Therefore, its imports are considerably higher than exports. Each year, India receives near about $70 billion of foreign currency as remittances from Indians living abroad.

#8 Hong Kong

IIt is the semi-autonomous and special governmental region of China. 

However, it reports separate data from China. Hong Kong holds $434.2 billion in forex reserves as of November 2019, which includes forex and other foreign reserve assets. 

However, it doesn’t have much in reserves in Gold.

Why the US and EU are not in the Top 8?

You may wonder why the US and European nations like Germany and France are not features among the top 8.

The reason is that these countries don’t need to hold other currencies of other countries as they are the owner of their currencies (Dollar and Euro) which is the most popular reserve currencies. 

Moreover, most of the global transactions take place in the US dollar and Euro. Therefore, they don’t have to reserve their own currencies.


As we have seen, Foreign currencies are vital for the economic sustainability of a Country. 

However, in 2020, there is a possibility of change among the top 10 Forex reserve countries. 

There is a trade conflict running between the US and China that may have an impact on the Chinese economy. On the other hand, India is doing well that may push it a step further.


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