Backing Scotland's Currency - Foreign Exchange Reserves for an Independent Scotland


The successful management of an independent country’s currency is often tied to its
ability to raise and maintain an adequate level of foreign currency reserves. These reserves
would be used to stabilise the currency’s exchange rate, protect against speculative attacks
on the currency and service debt obligations, amongst other uses. In the case of Scottish
independence, it will be important to show that sufficient reserves can be established
quickly enough after the launch of a new currency to ensure its stability. It is the purpose of
this paper to demonstrate that this proposal is viable.