Foreign Exchange Reserves are the foreign bonds and currency held by a government or central bank. The dominant currency used as a foreign exchange reserve is the US dollar, but Euros, Yen, and British Pounds are also used as reserve currencies. Foreign exchange reserves are kept to moderate fluctuations in exchange rates. For instance, if China felt that the Chinese Yuan was exchanging for fewer dollars than it should (the Yuan was overvalued), China could sell dollars and buy Yuan. This would decrease the value of the Yuan and bring the exchange rate closer to the desired goal. Reserves may also be necessary to service debts denominated in foreign currencies. In this case, a lack of sufficient foreign exchange reserves can lead to debt default, as Argentina experienced in 2001.