The purpose of national foreign exchange reserves: First, take China as an example. China implements a compulsory foreign exchange settlement system, that is, the foreign exchange imported and exported by enterprises is managed by the safe. In the international market, the dollar is the main trading tool, and gold is the recognized currency of all countries, so a country must ensure sufficient foreign exchange reserves to ensure payment abroad. The second point: in the foreign exchange market, the domestic exchange rate is affected by the relationship between supply and demand. In order to maintain stability, domestic regulatory agencies can intervene through their own foreign exchange reserves. For example, the current RMB, for example, faces enormous appreciation pressure. From the perspective of supply and demand, it is because the demand for RMB is too high that the central bank needs to buy dollars and throw RMB to balance it. The third point: a country's solvency is largely reflected in its economic strength, and economic development is the foundation. The foreign exchange reserve is the most direct embodiment of the guarantee ability. Fourth, the foreign exchange reserve represents the assets of the Central Bank of China. The more foreign exchange reserves, the more central bank assets. The more economic support our country gets in international affairs. At the same time, when the international financial crisis occurs, China is more capable of coping. For example, in the Asian financial crisis of 1997, countries announced the devaluation of their currencies one after another, while China, as a responsible big country, announced that the RMB would not depreciate. This is based on foreign exchange reserves! Foreign exchange payment: 1. Foreign exchange purchase by enterprises includes goods imported by enterprises and foreign investment. In fact, one of the main functions of purchasing foreign exchange by individuals is that they have food in their hands and don't panic. Because China does not implement floating exchange rate, it focuses on the limited floating of several currency combinations. In order to keep the exchange rate stable, the central bank may have to use foreign exchange reserves. For example, the RMB is facing depreciation against the US dollar, which proves that there are too many RMB in circulation and too few foreign currencies in the US dollar. In order to stabilize the exchange rate, the central bank will throw out the US dollar reserves and buy RMB, so as to reduce the RMB circulating in the market and restore the exchange rate balance with the US dollar. At this time, the role of foreign exchange reserves appears. At present, due to the huge surplus and the inflow of too many dollars, the RMB is facing the pressure of appreciation. The central bank either allows the RMB to appreciate naturally, but it obviously has negative effects. The central bank can only keep the appreciation within its controllable range. In order to maintain the exchange rate, only the corresponding RMB can be issued to balance the excessive dollars, which makes the RMB in circulation more rampant and leads to internal inflation. This is the dilemma faced by the central bank now, where appreciation and inflation coexist. To solve this problem, we may need to solve it from the institutional aspect, that is, change the compulsory settlement system, let foreign exchange stay abroad, and prevent the inflow of dollars.