Exchange Stabilization Fund - ESF


DEFINITION of 'Exchange Stabilization Fund - ESF'

Money available to the U.S. Treasury Department primarily used for participating in the foreign-exchange market in an attempt to maintain currency stability. It holds U.S. dollars, foreign currencies and special drawing rights.

BREAKING DOWN 'Exchange Stabilization Fund - ESF'

The ESF allows the U.S. government to intervene in the forex market to influence exchange rates, usually the domain of the central bank, without affecting the domestic money supply. This money is also used to provide financing to foreign countries.

  1. Monetary Policy

    Monetary policy is the actions of a central bank, currency board ...
  2. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  3. Currency

    A generally accepted form of money, including coins and paper ...
  4. Special Drawing Rights - SDR

    An international type of monetary reserve currency, created by ...
  5. Central Bank

    The entity responsible for overseeing the monetary system for ...
  6. U.S. Treasury

    Created in 1798, the United States Department of the Treasury ...
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