Foreign exchange reserve is the main form of international reserve. Foreign exchange reserves, also known as foreign exchange reserves, refer to foreign exchange assets held by central banks and other government agencies in various countries and can be converted into foreign currency at any time to meet the needs of international payment. Under normal circumstances, the sources of foreign exchange reserves are trade surplus and capital inflow, which are concentrated in domestic central banks to form foreign exchange reserves. The specific forms are: short-term government deposits abroad or other means of payment that can be cashed abroad, such as foreign securities, checks, promissory notes, foreign currency drafts of foreign banks, etc. It is mainly used to pay off the balance of payments deficit. When a large number of domestic currencies are sold, foreign exchange reserves are used to buy domestic currencies to intervene in the foreign exchange market and maintain the exchange rate of domestic currencies.