An account that a bank holds in a foreign currency in another bank. Nostro accounts are used for payment services or investment denominated in a foreign currency held with another bank, usually abroad.

For example, XYZ bank in Türkiye opens an account with a bank located in USA in US dollar. The Turkish bank treats this account as nostro account in USD held with the US bank. However, for the US bank will treats the account as vostro account of XYZ. The nostro account will be used for payments in USD and investments/ trades made abroad in US dollar. XYZ will also use this account to borrow funds denominated in US dollar.

The nostro accounts will help XYZ to do transactions abroad (specifically, in the US) without having to establish a presence there.

Nostro is a term originally derived from the Latin word for “ours”.