Official reserve refers to that the monetary authority (central bank) is financed the any deficit in the balance of payment. Official reserve transactions take place when a country withdraws from its stock of foreign exchange reserves to finance deficit in its overall balance of payment. A country With surplus in its overall BOP leads to rise in foreign exchanges reserves.
Importance Official reserve transactions help to bring a balance In the country's overall balance of payment. So, it plays an important role in economy of any country.