Britain’s forex reserves won’t prop up pound: ex-BoE official

LONDON (Reuters) – Former Bank of England deputy governor John Grieve said on Monday that Britain’s foreign exchange reserves would be an ineffective means of trying to prop up a collapsing pound, which hit a record low against the dollar on Monday.

Grieve told BBC radio that reserves were one of two ways of supporting the currency, the other being interest rates.

“We don’t have very many reserves compared to the scale of currency markets. So I think that that’s not seen as an effective weapon,” Grieve said.

Britain had net foreign exchange reserves worth 80.7 billion pounds ($86.84 billion) at the end of August, although the pound’s decline against the dollar and euro will have mechanically boosted that number this month.

($1 = 0.9293 pounds)

(Reporting by Andy Bruce, Editing by Kylie MacLellan)