When there is a deficit in the balance of payments, foreign exchange is provided to the foreign exchange market to make up for the domestic and foreign gaps in the foreign exchange market.
A country takes exchange rate stability as the external control goal, and the balance of payments deficit will increase the supply of local currency and decrease the demand in the foreign exchange market, thus causing the local currency to depreciate and the demand for foreign currency to increase. The state increases the foreign exchange supply in the international market by providing foreign exchange to the foreign exchange market, so as to balance the supply and demand of local and foreign currencies in the market and stabilize the exchange rate.