A currency basket is a group of currencies used to help stabilise a country's currency's value. Typically, the basket includes the currencies of a country's major trading partners. The currency basket can be used by a country's central bank to determine the value of its own currency. For example, if the value of the country's currency falls relative to the currencies in the basket, the central bank may intervene by buying its own currency and selling the currencies in the basket in an attempt to stabilize the value of the country's currency.
Currency baskets are used by central banks to measure currency performance. Furthermore, some businesses or investors use currency baskets to hedge or diversify the risk of currency fluctuations. Currency baskets typically include the currencies of the countries most relevant to the country or organisation using the basket, based on trade and investment activities.

A currency basket is a portfolio of selected currencies with different weightings, used to minimize the risk associated with fluctuations in any single currency. It functions as a benchmark or reference point for valuing a currency, determining exchange rates, or managing foreign exchange reserves. For example, the IMF's Special Drawing Rights (SDR) basket includes the U.S. dollar, euro, Chinese yuan, Japanese yen, and British pound, each weighted based on its importance in global trade and finance. By diversifying across multiple currencies, a basket reduces volatility and provides stability, as gains in one currency may offset losses in another. Central banks and investors often use currency baskets to hedge against exchange rate risks and maintain balanced exposure to global markets.