Domestic foreign currency savings are brought about by overseas capital inflows, and there are three ways: current account, capital account and speculative hot money. A large amount of foreign capital inflow (foreign currency against local currency) will lead to the appreciation of local currency, thus inhibiting domestic exports. The central government has taken actions to curb the appreciation of the local currency, and will conduct open market operations in the foreign exchange market, buying foreign currencies and selling local currencies to devalue the local currency. The process of selling local currency is equivalent to putting the base currency into commercial banks, which will lead to the growth of domestic money supply, thus bringing inflation risks.