Saturday, December 10

Britain’s forex reserves won’t prop up pound: ex-BoE official

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LONDON — Former Bank of England deputy governor John Grieve said on Monday that Britain’s foreign exchange reserves would be an ineffective means of trying to prop up a collapsing pound, which hit a record low against the dollar on Monday.

Grieve told BBC radio that reserves were one of two ways of supporting the currency, the other being interest rates.

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“We don’t have very many reserves compared to the scale of currency markets. So I think that that’s not seen as an effective weapon,” Grieve said.

Britain had net foreign exchange reserves worth 80.7 billion pounds ($86.84 billion) at the end of August, although the pound’s decline against the dollar and euro will have mechanically boosted that number this month. ($1 = 0.9293 pounds) (Reporting by Andy Bruce, Editing by Kylie MacLellan)