This article discusses the essence of gold and foreign exchange reserves and their purpose and use in the current conditions in Ukraine and in the world. The purpose of this article is to highlight the main trends in the formation and use of official reserves and to develop proposals to optimize their structure and the mechanism for managing them. The paper analyzes the world and national tendencies of formation and use and the statistics on Ukraine on gold and foreign exchange reserves. The focus is on the study of trends in the field of foreign exchange reserves of Ukraine in 2014–2020. The results of the research show that significant losses of foreign exchange reserves at the beginning of this period can be explained by Russia’s attack on Ukraine, which resulted in the loss of part of the country’s production potential, and the NBU was allowed to use a considerable amount of reserves for interventions in order to maintain the hryvnia against a fixed exchange rate. It is also noted that since 2015, due to the transition to a floating exchange rate, inflation targeting and currency liberalization, there has been a tendency to increase the foreign exchange reserves of Ukraine, and their level has recovered. The conclusion can be made that their level, while meeting some of the traditional criteria of sufficiency, still does not allow one to avoid the impact of external shocks on Ukraine’s financial system. It is noted that despite the need to increase them to ensure the monetary and financial stability, Ukraine does not have a sufficient capacity to do so, given the adverse economic environment and a number of political factors. In the future, the results of this study will be used to formulate proposals for improving the mechanism of formation and use of Ukraine’s international reserves. JEL classіfіcatіon: E58 Manuscript received 29.04.2020