March 3, 2014 / 4:34 PM / 4 years ago

Canada adds sterling to foreign currency reserves

OTTAWA (Reuters) - Canada said on Monday it will start including sterling-denominated assets in its foreign currency reserves to improve liquidity and better prepare the country against potential shocks.

A bookmaker is seen holding money during the Cheltenham Festival horse racing meet in Gloucestershire, western England March 15, 2011. REUTERS/Eddie Keogh

The country’s official reserves currently include U.S. dollars, yen and euros.

The finance ministry and the central bank have been assessing the possibility of including additional currencies in the Exchange Fund Account, the main repository of the international reserves.

“The addition of pound sterling assets to the Exchange Fund Account will diversify the foreign currency composition of Canada’s foreign reserves and improve the liquidity of the portfolio,” Finance Minister Jim Flaherty said in a statement.

The foreign reserves exist to help protect the value of the Canadian dollar and provide the government with foreign currency liquidity.

Canada’s international reserves totaled $72.778 billion in January, of which $40.41 billion was in U.S. dollars.

Reporting by Louise Egan; Editing by Nick Zieminski

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