Generally speaking, the increase in foreign exchange reserves can not only enhance the ability of macroeconomic control, but also help maintain the international reputation of the country and enterprises, help expand international trade, attract foreign investment, and reduce the cost of domestic enterprises. Financing costs, preventing and resolving international financial risks. Of course, this does not mean that more foreign exchange reserves are better, because holding foreign exchange reserves comes with a price. First, foreign exchange reserves are represented by holding a financial claim expressed in foreign currency and are not used in domestic production. This creates an opportunity cost problem, that is, if the monetary authorities do not hold reserves, they can use these reserve assets to import goods and services, increase the actual resources of production, thereby increasing employment and national income, while holding reserves gives up this kind of interest. Therefore, when holding foreign exchange reserves, the opportunity cost issue must be considered. Second, the increase in foreign exchange reserves requires a corresponding expansion of money supply. If foreign exchange reserves are too large, it will increase inflationary pressure and make monetary policy more difficult. In addition, if you hold too many foreign exchange reserves, you may also suffer losses due to the depreciation of foreign currency exchange rates. Therefore, foreign exchange reserves should be maintained at a moderate level.

The appropriate level of foreign exchange reserves depends on many factors, such as import and export status, scale of foreign debt, actual utilization of foreign capital, etc. Foreign exchange reserves should be maintained at an appropriate level based on the benefits and costs of holding foreign exchange reserves and the situation in these aspects. To increase foreign exchange, it is necessary to issue RMB to purchase RMB. The supply will increase, the RMB will depreciate, and the exchange rate will fall. .