(1) Balance of payments current account surplus

It is the main source of international reserves. The most important surplus is trade surplus, followed by labor surplus. At present, the status of labor balance in economic exchanges among countries is constantly improving, and the trade balance deficit and even the entire balance of payments deficit of many countries are made up by the surplus of labor balance. When there is no net capital outflow, if a country's current account is in surplus, it will inevitably form international reserves; In the absence of net capital inflow, if a country has a current account deficit, it will inevitably reduce international reserves.

(2) Capital account surplus in balance of payments

It is an important supplementary source of international reserves. At present, international capital flows frequently and on a huge scale. When the inflow of loan capital exceeds the outflow of loan capital, a capital account surplus will be formed. If there is no current account deficit at this time, these surpluses will form international reserves. This kind of reserve is characterized by liabilities, which must be repaid at maturity. But before repayment, it can be used as a reserve asset. When a country's loan capital outflow is greater than the loan capital inflow, there will inevitably be a capital account deficit. If there is a current account deficit at this time, international reserves will be greatly reduced. Foreign exchange obtained by the market

As a result of the central bank's intervention in the foreign exchange market, it can also obtain some foreign exchange, thus increasing international reserves. When a country's currency exchange rate has an upward trend or has risen due to the influence of supply and demand, the country's central bank will often conduct open market business in the foreign exchange market, sell its own currency and buy foreign exchange, thus increasing the country's international reserves. On the other hand, when a country's currency exchange rate has a downward trend or has fallen, it will buy local currency and sell other hard currencies, thus reducing its reserves. Generally speaking, countries with rising currency exchange rates are often countries with large balance of payments surpluses. Therefore, there is no need to increase its excessive foreign exchange reserves by buying foreign exchange. However, due to the need of intervention, it will consciously or unconsciously increase foreign exchange reserves.

This form of intervention mainly appeared in the form of individual state intervention before 1970s, and developed into joint intervention in 1980s. For example, in 1978, the exchange rate of the US dollar plummeted, and the United States once sold about 100 billion US dollars of German marks to stop the decline of the exchange rate of the US dollar. However, in the 1990s, this intervention expanded. For example, 1988, in order to defend the defense line of 1 USD 120 yen, western central banks jointly intervened in the foreign exchange market. Only on the day of 1988, the United States, Japan, the former Federal Republic of Germany, France and Britain. Since 1997, due to the international financial turmoil, especially the new dollar crisis from 1993 to 1995, and the southeast Asian currency crisis from 1997, joint intervention has been further strengthened. Theory and experience have proved that when a country's exports decrease in international transactions or a temporary balance of payments deficit is caused by catastrophic natural disasters, wars and other emergencies, and this deficit cannot be balanced by borrowing foreign debts, people's first choice is to use international reserves to make up for this deficit. This can not only safeguard the country's international reputation, but also avoid being forced to take measures such as restricting imports to balance the deficit and affect the normal development of the national economy. At this time, using part of international reserves to balance the deficit will slow down the negative impact of some radical economic austerity policies adopted by the governments of deficit countries to balance the international payments on the domestic economy. International reserves can play a buffer role here. However, if there is a fundamental imbalance in a country's balance of payments, the use of international reserves will not completely solve the problem, but will lead to the exhaustion of international reserves. Therefore, when a country's economy suffers from persistent balance of payments deficit due to policy mistakes or unreasonable economic structure, it includes

Reserve assets, including foreign exchange reserves, must be used carefully. This is one of the important functions of international reserves. As mentioned above, when the Group of Ten defined international reserves, it emphasized that international reserves were "intervention assets" to maintain the currency exchange rate. Especially after1February, 973, the floating exchange rate system was widely implemented in the international community. Although in theory, the central banks of all countries did not undertake the obligation to maintain exchange rate stability, and the exchange rate followed the market, in practice, it was this system that made the exchange rate fluctuate frequently and greatly. Therefore, for the benefit of the country, all countries keep the currency exchange rate at an ideal level, and more or less use international reserves to exchange local currency. From 65438 to 0985, seven industrialized countries in the west established a joint exchange rate intervention mechanism. One of the operating bases of this mechanism is to hold a certain amount of international reserves. To this end, many countries have also set up foreign exchange stabilization funds to ensure the capital demand for intervention in the foreign exchange market. The foreign exchange stabilization fund is generally composed of foreign exchange, gold and domestic currency. When the foreign exchange rate continues to rise and the local currency exchange rate continues to fall in a certain period of time, sell foreign exchange in the foreign exchange market and buy local currency through the stabilization fund. On the contrary, sell local currency, buy foreign exchange and stabilize the exchange rate. Because the foreign exchange stabilization fund is not inexhaustible, when a country's balance of payments is fundamentally or permanently unbalanced and the exchange rate continues to rise and fall, the use of the stabilization fund must be cautious.

A realistic example fully shows that maintaining sufficient international reserves, especially foreign exchange reserves, plays an important role in maintaining the exchange rate of a country's currency or regional currency and stabilizing foreign exchange and money markets. This case is the currency crisis in Southeast Asia. 1997 originated in Thailand and then spread to Malaysia, the Philippines, Indonesia and Singapore. 1July 2, 1997, after several months of fluctuation, the central bank of Thailand finally abandoned the exchange rate system linking the Thai baht to 13' s "basket" currencies and implemented managed floating instead. After the news was announced, the exchange rate of Thai baht against the US dollar fell by 16%, and the financial crisis in Thailand finally surfaced. Then, the central bank of the Philippines can't stand the blow of speculative forces. On July 1 1, it was announced that the exchange rate of the peso against the US dollar was allowed to fluctuate within an unspecified "wider" range, and then the exchange rate of the peso against the US dollar depreciated by 10%. The currencies of Malaysia, Indonesia and even Singapore have also been affected by this, and the exchange rates have fallen. Currency crisis broke out in Southeast Asia.

There are multiple reasons for the currency crisis in Southeast Asian countries. Take Guo Feng as an example, in addition to the imbalance of national economic policy, especially monetary policy (the authorities opened their doors to foreign investment and provided a large number of low-interest US dollar loans at home and abroad), financial institutions over-invested in real estate (before the crisis, Thailand actually lent 50% of the total loans, Singapore accounted for 33% and Malaysia accounted for 30%). Indonesia accounts for 20%), the bank's bad debts are serious (the total amount of bad debts of financial institutions is nearly 40 billion US dollars), the foreign debt is high (it exceeded 80 billion US dollars in May 1997, accounting for 49% of GDP), and the current account deficit of the balance of payments is too large (by May 1997, the deficit has reached 164 billion US dollars). Thailand's foreign exchange reserves in February1996 amounted to 38.7 billion US dollars, which was formed by Thailand's high interest rate policy (Thailand's preferential interest rate has always been at a high level of 13.25%, making it one of the countries with the highest interest rates in the Asia-Pacific region). 1997 From February to May, in order to stabilize the Thai baht, Thailand used 6 billion dollars of its small foreign exchange reserves, and the total foreign exchange reserves further decreased. Other countries in Southeast Asia (except Singapore) also have very limited foreign exchange reserves. For example, the foreign exchange reserves held by Malaysia's central bank were only $28.35 billion at the end of June 1997, while Indonesia's was only $19.9 billion at March 1997. Due to the general shortage of foreign exchange reserves in Southeast Asian countries, when the currency crisis comes and the local currency is hit by strong foreign exchange speculation, it will be unable to defend its own currency. In addition, when the currency crisis occurred, in the face of speculators' attacks, the central banks of these countries ignored their strength and constantly used foreign exchange reserves to intervene in the market. Results Due to the shortage of foreign exchange reserves, the intervention effect was low, which not only failed to achieve the purpose of cracking down on speculation, but also caused losses to reserve assets.

The difference between international reserves and international solvency

International liquidity, also known as international liquidity, in short, refers to a country's ability to pay abroad. Specifically, it refers to all international liquidity and assets that a country directly controls or can use when necessary to adjust the balance of payments, pay off international debts and support the stability of the local currency exchange rate. It is actually the sum of a country's own reserves (also known as first-line reserves) and borrowed reserves (also known as secondary reserves).

Therefore, the relationship among international liquidity, international reserves and foreign exchange reserves can be expressed as follows:

First, international liquidity is the sum of self-owned international reserves, borrowed reserves and induced reserve assets (see table 1-2). Among them, self-owned international reserves are the main body of international liquidity, so domestic academic circles also regard international reserves as narrow international liquidity.

Table 1-2 Composition of International Liquidity

Second, foreign exchange reserves are the main body of self-owned international reserves, so they are also the main body of international liquidity.

Third, convertible assets can be regarded as a part of international liquidity, or included in the scope of broad international liquidity, but they may not necessarily become international reserve currencies. Only those convertible currencies that are relatively stable, widely used in economic and trade exchanges and market intervention, and have a special position in the world economy and monetary system can become reserve currencies.

Correctly understand international liquidity and its relationship with international reserves, make full use of international credit or the above financing agreement, and quickly obtain short-term funds for a country's monetary authorities.

Foreign exchange assets are of great significance to support its external payment needs; It is very helpful to understand some important developments in the international financial field, such as the influence of European money market on the international solvency of countries, the gradual decline of the ratio of international reserves to imports in some developed countries, the problems existing in the international monetary system and the research on reform plans.