Pound Could Lose Reserve Status After Brexit

January 26, 2017 Share Print 0

The British pound will become “increasingly irrelevant” as a global reserve currency once the U.K. leaves the EU, new research from Deutsche Bank has claimed.

This could be harmful for the U.K. which relies on a strong reserve status, and the resultant capital inflows, to help pay down its current account deficit.

According to the study, sterling’s role in the IMF’S currency composition of official foreign exchange reserves (COFER) has fallen in recent months and is set to diminish further as Britain’s role in the global economy weakens outside of the EU.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.