First: What are foreign exchange reserves?
Foreign exchange reserves are assets held by the monetary authorities and can be converted into foreign currencies at any time. Its main forms are foreign bank deposits and foreign government bonds.
Second: What are the advantages of increasing foreign exchange reserves?
A certain foreign exchange reserve is an important means for a country to adjust its economy and achieve internal and external balance. When the balance of payments is in deficit, the use of foreign exchange reserves can promote the balance of payments; When the domestic macro-economy is unbalanced and the total demand exceeds the total supply, foreign exchange can be used to organize imports, thus adjusting the relationship between total supply and total demand and promoting macroeconomic balance.
When the exchange rate fluctuates, foreign exchange reserves can be used to intervene in the exchange rate to stabilize it. Therefore, foreign exchange reserves are an indispensable means to achieve economic balance and stability, especially when economic globalization is developing and a country's economy is more susceptible to the influence of other economies.
Generally speaking, increasing foreign exchange reserves can not only enhance the macro-control ability, but also help to maintain the international reputation of enterprises, expand international trade, attract foreign investment, reduce the financing cost of domestic enterprises, and prevent and resolve international financial risks.
The appropriate level of foreign exchange reserves depends on many factors, such as import and export, the scale of foreign debt, and the actual utilization of foreign capital. Foreign exchange reserves should be kept at a moderate level according to the comparison of income and cost and these conditions.
What are the benefits of foreign exchange reserve growth? I believe everyone has understood this. For more information, please pay attention to Cailian Capital. If an investor chooses the analysis system, his investment transaction will become easier, investors can learn theoretical knowledge, and use extreme anti-channel indicators to easily judge the trend, making the transaction very relaxed and happy, and the wealth space will become very large!