foreignasset

Foreignasset refers to the cross-border claims of residents of a country on non-residents, i.e., assets held abroad by domestic residents. In macroeconomic accounting, foreign assets are part of a nation’s international investment position and include financial assets such as foreign stocks and bonds, bank deposits held in foreign banks, loans to foreign entities, and derivatives, as well as non-financial assets like overseas real estate or foreign-owned businesses. The concept contrasts with foreign liabilities, which are non-resident claims on residents.

Foreign assets can be categorized as financial or non-financial. Financial foreign assets include portfolio investments, direct investments, loans, and reserve holdings denominated in foreign currencies. Non-financial foreign assets encompass tangible assets and business interests located abroad. Data on foreign assets are compiled in international accounts and standardized by institutions such as the International Monetary Fund and the Bank for International Settlements, and are often reported in the international investment position (IIP) of a country.

The IIP records the stock of foreign assets and foreign liabilities at a specific date, while capital and financial accounts track flows over a period. Changes in foreign assets reflect cross-border investment activity, exchange rate movements, and valuation effects. For policymakers, foreign assets—especially official foreign exchange reserves—are a key tool for monetary sovereignty and external stability. For investors and firms, foreign assets offer diversification and access to foreign markets, but introduce currency and sovereign risk.

Examples include a country’s residents holding U.S. Treasuries, European equities, or foreign real estate, as well as central banks holding foreign currency reserves. See also international investment position, balance of payments, and foreign exchange reserves.