In other words, when there is a deficit in international income (that is, the total import volume of your country exceeds the total export volume), in order to buy these extra imported products, you need to buy foreign currency to settle (pay overseas exporters). Then your country's foreign exchange reserves will be used to buy overseas products, and your country's foreign exchange reserves will be reduced. Then, according to the most basic principle of supply and demand, because the country's foreign exchange reserves are small, when people need to buy foreign currency again, the price of foreign currency will rise. Relatively speaking, the appreciation of foreign currency equals the depreciation of local currency.

For example, suppose there are only two countries, A and B. A has a currency reserve of 654.38 million yuan in country B. In this year, A bought an import of150,000 from B and only exported150,000 to B, so the net import was 50,000. A will have a balance of payments deficit of 50,000 yuan, and this 50,000 yuan will be paid to B from the foreign exchange reserves of A. After paying this 50,000 yuan, A now has only 50,000 yuan in foreign exchange reserves, and any other foreign exchange needs of B can only be taken from this 50,000. If the demand remains unchanged, the currency of country B will appreciate and depreciate relative to country A due to the small remaining foreign exchange reserves.