What are the advantages of diversification of reserve currency and asset forms?
When managing and operating foreign exchange reserves, governments in various countries generally follow three principles: safety, liquidity and profitability. We should choose currencies with low risk and relatively stable currency value, pay close attention to the balance of payments and economic situation of these currency issuing countries, predict the exchange rate trend, adjust the currency structure in time, and reduce the exchange rate and interest rate risks; Generally speaking, we should give consideration to these three principles as much as possible, adopt a combination strategy, "don't put all your eggs in one basket", and diversify foreign exchange reserves to reduce risks and realize appreciation.