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Reserves management

The Central Bank of Malta owns and manages the country's official reserves which consist of a portfolio of foreign and domestic financial assets. According to Article 127(2) of the Treaty on the Functioning of the European Union, these reserves, along with those of the other national central banks and the official reserves of the European Central Bank, form part of the reserves held by the Eurosystem.

The Board of Directors is responsible for setting the Bank’s overall investment strategy whilst the Bank's Investment Policy Committee is entrusted with monitoring the performance of the investment portfolio and making tactical adjustments. Prior to the adoption of the euro, the primary purpose of the reserves was to safeguard the value of the domestic currency and to support the exchange rate peg. Accordingly, the overriding objective of reserve management used to be to ensure appropriate liquidity and to preserve the value of the investment portfolio. Following the Bank’s membership in the Eurosystem, the main investment objective of the Bank is to maximize the return on the portfolio within the risk and liquidity parameters approved by the Board.

The Bank also manages a portfolio of foreign reserves on behalf of the European Central Bank in conjunction with another Eurosystem member.