Management of Eurosystem foreign reserve assets
After joining the euro area, Lithuania contributed a share of foreign reserve assets to the Eurosystem foreign reserves and became its co-proprietor. The reserve is meant for ensuring the stability of the euro exchange rate.
The contribution of each Member State to the Eurosystem foreign reserves is made by every national central bank (NCB) and is proportional to the national gross domestic product and population (the proportion is the ECB capital key).
The Eurosystem foreign reserve assets are invested in US dollar and Japanese yen denominated assets and also gold. Each NCB may decide to manage their contribution independently, pool the management with another NCB (thus saving investment costs and expanding the size of joint investment portfolio), or opt-out from the management activities.
On 1 January 2015, the Bank of Lithuania signed the Pooling Agreement with Banco de Portugal. The contributions of both NCBs to the Eurosystem foreign reserves were pooled together into one US dollar denominated investment portfolio. The joint management of the pooled investment portfolio is based on specialisation: Banko de Portugal decides on interest rate risk-based investments, while the Bank of Lithuania makes decisions based on credit risk exposure.
The share of the Eurosystem foreign reserve investment profit is distributed to NCBs proportionally to their ECB capital key.