When there is a deficit in the balance of payments, foreign exchange income is less than foreign exchange expenditure, foreign exchange reserves are reduced, and the country's foreign exchange supply is less than foreign exchange demand. At the same time, the decrease of the national foreign exchange rate, the increase of domestic foreign exchange demand and insufficient supply will lead to the appreciation of foreign exchange against the local currency, which corresponds to the depreciation of the nominal exchange rate of the currency.

The balance of payments is a comprehensive reflection of a country's foreign economic activities and has a direct impact on the changes of a country's currency exchange rate. Moreover, from the perspective of foreign exchange market transactions, international trade in goods and services constitutes the basis of foreign exchange transactions, which also determines the basic trend of the exchange rate.