Exchange Stabilization Fund

The State Exchange Stabilization Fund is a fund of the Treasury of the United States, which is normally used for foreign exchange interventions. This gives the U.S. government the ability to directly influence the exchange rate without affecting the domestic money supply. The fund is called in the U.S. Exchange Stabilization Fund (ESF).

The Fund was established as part of the Gold Reserve Act 1934. With the agreement of the President he can be active in the fields of gold, foreign exchange and other financial instruments and securities.

In June 2008, the Fund held assets worth $ 51.2 billion. In February 2009, the Fund held only euro and yen worth of $ 24.8 billion U.S. dollars. Further, the Fund during the financial crisis in Q4 2008 should not have intervened in the currency markets.

As in September 2008, withdrew in the course of the bankruptcy of investment bank Lehman Brothers investors to large amounts of money from the money market funds, the U.S. Treasury announced that the investors by using $ 50 billion U.S. dollars of the stock market stabilization fund to protect against losses. Even in the 90 years, the fund was already for rescue efforts.

Some people believe that the fund is used to suppress the gold price in the event of a panic.