2. Intervene in the foreign exchange market and stabilize the local currency exchange rate.

3. Maintain international reputation and improve external financing capacity.

4. Enhance comprehensive national strength and ability to resist risks.

Specific explanation:

The first point:

Taking China as an example, China adopts a compulsory foreign exchange settlement system, that is, the foreign exchange imported and exported by enterprises is subject to the management of safe.

In the international market, the dollar is the main trading tool, and gold is the recognized currency of all countries, so a country must ensure sufficient foreign exchange reserves to ensure payment abroad.

The second point:

In the foreign exchange market, the domestic exchange rate is affected by the relationship between supply and demand.

In order to maintain stability, domestic regulatory agencies can intervene through their own foreign exchange reserves.

For example, the current RMB, for example, faces enormous appreciation pressure. From the perspective of supply and demand, it is because the demand for RMB is too high that the central bank needs to buy dollars and throw RMB to balance it.

The third point:

A country's solvency is largely reflected in its economic strength, and economic development is the foundation. Foreign exchange reserves are the most direct embodiment of the ability to guarantee.

The fourth point:

Foreign exchange reserves are the assets of the Bank of China. The more foreign exchange reserves, the more central bank assets. The more economic support our country gets in international affairs.

At the same time, when the international financial crisis occurs, China is more capable of coping. For example, in the Asian financial crisis of 1997, countries announced the devaluation of their currencies one after another, while China, as a responsible big country, announced that the RMB would not depreciate. This is based on foreign exchange reserves.