The reason countries have foreign reserves is to make sure that a country has backup funds if its national currency rapidly devalues or becomes entirely worthless. It’s common practice for central banks of different countries around the world to hold large amounts of reserves of foreign exchange. Most of these reserves are held in US dollars since it is the most traded currency in the world…The amount of monies a country holds in its reserves has a lot to do with the county’s currency rate…Iraq has the largest foreign currency reserves in its’ history…