The difference between settlement and sale of foreign exchange refers to the difference between all customers' settlement and sale of foreign exchange through banks, which must be digested, otherwise the exchange rate will not be the current exchange rate due to the imbalance between supply and demand of foreign currency and RMB.

At present, the difference between settlement and sale of foreign exchange is digested by the central bank, which maintains the balance between market supply and demand and stabilizes the exchange rate by buying or selling foreign exchange in the foreign exchange market. The central bank buys foreign exchange from the market to form foreign exchange reserves, and the central bank sells foreign exchange to the market, which will reduce the amount of foreign exchange reserves. Therefore, because the difference between settlement and sale of foreign exchange is absorbed by the central bank, it will cause changes in foreign exchange reserves.