The willingness of government agencies and residents in other countries to hold sterling for their own convenience is also of advantage to this country. The accumulation of these holdings has augmented the available supply of capital and although the employment of these funds, of course, costs something, the use of sterling as an international currency increases the national earnings through the provision of a variety of services. The fact that the holding of sterling by overseas residents is a voluntary act, and may therefore be affected by confidence, reinforces the need to maintain the quality of the currency. Thus, overseas holdings are an important element in the whole monetary position. This article examines their growth, distribution and character, the motives of different countries and classes of holders, and the factors which influence movements in their holdings.