Introduction
The Exchange Stabilization Fund (ESF) consists of three types of assets: U.S. dollars, foreign currencies, and Special Drawing Rights (SDRs)1. The financial statement of the ESF can be accessed through the links on the right hand side to either "Latest Financial Reports" or "Finances & Operations."
The ESF can be used to purchase or sell foreign currencies,
to hold U.S. foreign exchange and Special Drawing Rights
(SDR) assets, and to provide financing to foreign governments.
All operations of the ESF require the explicit authorization
of the Secretary of the Treasury ("the Secretary").
The Secretary is responsible for the formulation and implementation
of U.S. international monetary and financial policy, including
exchange market intervention policy. The ESF helps the Secretary
to carry out these responsibilities. By law, the Secretary
has considerable discretion in the use of ESF resources.
The legal basis of the ESF is the Gold Reserve Act of 1934.
As amended in the late 1970s, the Act provides in part that
"the Department of the Treasury has a stabilization
fund …Consistent with the obligations of the Government
in the International Monetary Fund (IMF) on orderly exchange
arrangements and an orderly system of exchange rates, the
Secretary …, with the approval of the President, may
deal in gold, foreign exchange, and other instruments of
credit and securities."
Last Updated: August 6, 2007
1. The Special Drawing Rights, or SDR,
is an international reserve asset that was created by the
IMF as a supplement to existing reserve assets.
