The foreign exchange reserves held by the monetary authorities include foreign bank deposits deposited by the monetary authorities. Foreign exchange reserves mainly refer to external liquid assets held by the monetary authorities of various countries, mainly bank deposits and treasury bonds.

Foreign exchange reserves refer to convertible foreign currencies held by a country's monetary authorities that can be used for external payment. Not all national currencies can be used as international reserve assets. Only those currencies that occupy an important position in the international monetary system and can be freely converted into other reserve assets can be used as international reserve assets. China and other countries in the world often use foreign exchange reserves in foreign trade and international settlement, mainly including US dollars, euros, Japanese yen, British pounds and so on.

What does the decline in foreign exchange reserves mean?

The decline of foreign exchange reserves mainly shows two points, one is the emergence of trade deficit, and the other is the increase of foreign investment. When the trade deficit appears, foreign exchange flows out and foreign exchange reserves decline; In addition, if a country's foreign investment increases substantially, it also needs to use more foreign exchange, which will lead to a decline in foreign exchange reserves.