Foreign Exchange Reserve, also known as the Reserve, refers to the Foreign Exchange assets that are centrally controlled by central banks and other government agencies of various countries and can be converted into Foreign countries at any time to meet the needs of international payments.
Under normal conditions, the source of foreign exchange reserves and capital inflows, concentrated in the domestic to form foreign exchange reserves.
The increase of foreign exchange reserves can not only enhance the ability of macro-control, but also help maintain the international reputation of the country and enterprises, help expand international trade, attract foreign investment, reduce the financing cost of domestic enterprises, and prevent and defuse international financial risks.
The appropriate level of foreign exchange reserves depends on many factors, such as the status of import and export, the size of foreign debt, and the actual utilization of foreign capital.
Foreign exchange reserves should be maintained at an appropriate level in light of the benefits, costs and conditions in these areas.
