First, adjust the balance of payments to ensure external payment.

The second is to intervene in the foreign exchange market and stabilize the local currency exchange rate.

The third is to maintain international reputation and improve external financing ability.

The fourth is to enhance comprehensive national strength and ability to resist risks.

Under the current foreign exchange management system, the central bank has unlimited responsibility for the repurchase of foreign exchange funds. With the growth of foreign exchange reserves, foreign exchange holdings are increasing. Once the RMB appreciates, the dollars taken from China by foreign exchange war funds will greatly increase. So foreign exchange reserves have shrunk.

For example, when the RMB exchange rate was 8: 1, an international institution entered the China market with 1 USD and exchanged 800 million RMB. Now, when the RMB appreciates to 4: 1, 200 million US dollars will leave the China market, China's foreign reserves will virtually double, and China's ability to resist financial risks will decline.