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The role of foreign exchange reserves

The role of forex d forexrebatesbrokerscount brokers forexbonusrebate cashback forex 1. adjust the balance of payments, to ensure foreign payments 2. intervene in the foreign exchange market, to stabilize the exchange rate of the local currency 3. maintain international credibility, to improve the ability of foreign financing 4. enhance the comprehensive national strength forexdiscountbrokers the ability to resist risks First point: Take our country as an example, China adopts a compulsory settlement system, that is to say, enterprises import and export foreign exchange are subject to the management of the Foreign Exchange Bureau constraints in the international market In the international market, the U.S. dollar is the main trading instrument and gold is the currency recognized by all countries, so a country must ensure sufficient foreign exchange reserves to ensure payment to foreign countries Second point: In the foreign exchange market, the exchange rate of the country is affected by supply and demand In order to maintain stability, the countrys governing body can intervene through the foreign exchange reserves held by itself For example, a current RMB, for example, is currently facing huge appreciation The supply and demand analysis is because the demand for RMB is too strong, which is necessary for the central bank to buy dollars and sell RMB to balance the third point: a large part of a countrys solvency is reflected in its economic strength, economic development is the basis of foreign exchange reserves is the most direct guarantee of the ability to reflect the fourth point: foreign exchange reserves represent the assets of the central bank, the more foreign exchange reserves, the more assets of the central bank Our country to carry out international affairs will have economic support At the same time, when the international financial crisis, our country will have the ability to face the Asian financial crisis in 1997, for example, countries have announced currency devaluation, and our country in a responsible power, announced that the RMB does not devalue this is based on foreign exchange reserves
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