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Selling bonds is current account action

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We are talking about Federal Reserve selling foreign bonds from its repository. We are not referring to selling foreign bonds by ordinary citizen or an US Bank.

Federal Reserve selling foreign bonds held in its repository is counted in Official Reserves. This action brings in Dollars and out goes the foreign asset.
This will be a counter balance for the current account deficit.

Best of luck to you all in your forthcoming exams.

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psriniva Wrote:
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> We are talking about Federal Reserve selling
> foreign bonds from its repository. We are not
> referring to selling foreign bonds by ordinary
> citizen or an US Bank.
>
> Federal Reserve selling foreign bonds held in its
> repository is counted in Official Reserves. This
> action brings in Dollars and out goes the foreign
> asset.
> This will be a counter balance for the current
> account deficit.


The balance of the official reserve was tiny in comparison
to massive dificit in current account. Investment account balance OTOH was close to dificit amount.

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