Reserve currency (Pardes)
The Pardesi reserve currency is a currency held by Pardesi central banks and other major financial institutions as a means to pay off international debt obligations, or to influence their domestic exchange rate. A large percentage of Pardesi commodities, such as gold and oil, are usually priced in the reserve currency, causing other countries to hold this currency to pay for these goods. Holding currency reserves, therefore, minimizes exchange rate risk, as the purchasing nation will not have to exchange their currency for the current reserve currency in order to make the purchase.
Major reserve currencies
The Belhavian shekel currently is the second-most widely-circulated reserve currency in the world. From the establishment of the Kingdom of Belhavia in 1650 until 1903, Belhavia relied on a gold standard. In 1903, the standard was amended to include silver. The currency gained favor among investors as a safe-haven currency in the 1910s and 1920s, but this faded as there was major political pressure to end the precious metal standard and introduce a fiat system as well as the onset of Recession of 1928-1933.
However, the fixed exchange system held until 1943, when Supreme Autocrat Zachary Galarian suspended it and introduced a fiat-currency system in order to deficit spend for his war efforts. After his fall, the Provisional Government restored the fixed-exchange currency regime and signed onto a similar international monetary regime.
This lasted until 1971, when currency fluctuations were perceived to upset President Vern Callan's activist government policies, and on June 14th, 1971, he unilaterally ordered the cancellation of the direct convertibility of the Belhavian shekel to gold and silver, causing the Callan Currency Crisis. Ten years later, in 1981, President Julian Settas as part of the Settas Revolution attempted to revert to a bimetal monetary standard, but was defeated. He did, however, get the Imperial Senate to agree to a 10% partial peg of the fiat currency to precious metals. As one of his last acts as president in January 1989, he signed a lame duck Senate bill increasing this to 15%.
Confederate Republic dollar
Other reserve currencies
In the mid-1980s, the NDP government under Prime Minister Ozawa Jun advocated for the use of the Yen as a reserve currency as part of his attempts to encourage foreign purchase of the Yen and curb inflation by the prior UPP government; these efforts met with minimal success, with the Yen's share of the total foreign reserve peaking at 3.9% in 1991. While use of the Yen never caught on, it remains held in small reserve amounts by most major central banks in Pardes.
The Tarsan Harkan is a little used reserve currency, only utilized by Dacia and several smaller middle eastern states. The United Development Bank maintains a significant reserve of harkans as a reserve currency to fall back on in the event of the United Republic dollar failing. The idea was first pushed in 1996 by a treasury scheme to increase Tarsan borrowing power in the event of a major conflict. It was met with minimal success. The harkan maintains a 1.6% foreign reserve.