(1) Excessive foreign exchange reserves and rapid growth will inevitably lead to an increase in the cost of holding foreign exchange in China, resulting in a waste of resources and idle funds. The opportunity cost of holding such high foreign exchange reserves is very high. If China holds foreign debts and borrows them at the same time, it is equivalent to lending money to foreigners at low cost. At the same time, the high foreign exchange reserves have not been transformed into actual means of production, so it is impossible to create wealth. Therefore, the excessive cost of foreign exchange reserves will have a certain negative impact on the development of the national economy.

(2) Excessive foreign exchange reserves tend to aggravate domestic inflation. Due to the imbalance between supply and demand of foreign exchange in China and the compulsory settlement and sale of foreign exchange, the government must put more RMB into the market to recover the constantly flowing foreign exchange, and the cash flow in the market is increasing, resulting in excess liquidity and serious inflation.

(3) The rapid growth of foreign exchange reserves inevitably intensifies the pressure of RMB appreciation, thus inevitably affecting the international competitiveness of China's export commodities. In most cases, the increase of a country's foreign exchange reserves will lead to the rise of its currency exchange rate. However, under the international situation that Europe and the United States continue to impose various trade sanctions on China and the RMB exchange rate continues to rise, foreign trade enterprises without core technology are no match for large enterprises and foreign companies after losing their price advantage, thus closing down one after another, declining exports, increasing unemployment and slowing down economic growth. You can find it on the www. Qdyhtzgl. Learn more foreign exchange skills, and at the same time, there are daily operation strategies and skills formulated by analysts to improve their level faster.