You go to the bank to deposit 100 USD, or foreigners deposit 100 USD, which will increase the foreign exchange reserves 100 USD;

But this reserve may be owed to others and must be repaid.

Since 1990s, China has been issuing more RMB, and the exchange rate of RMB against the US dollar is 65,438+0.

Therefore, the more foreign exchange reserves, the more RMB, so it will depreciate.

If you change RMB into foreign exchange as in the previous example, foreigners will change it if they want to leave China.

Then the RMB will depreciate rapidly, because there are many people who need foreign exchange and no one wants RMB.

This is not something that has never happened before. In the so-called 97 financial storm, both Indonesia and South Korea devalued their currencies rapidly.

And then cause other serious consequences.