Most central banks invest in derivatives – Central Banking

A majority of central banks resort to derivatives as a way to optimise their wider reserve management objectives.

In Reserve Benchmarks 2021, 69% of 45 participants said they use derivatives for some purpose. Two central banks did not provide data to this question. 

Central banks may use derivatives – defined here as a security whose value depends on some other underlying asset – to bolster returns and mitigate risks associated with interest rates or currency fluctuations.

In fact, most (58%)