2. Intervene in the national economic market, especially the foreign exchange market, in order to stabilize the national currency exchange rate;
3. Maintain the country's reputation in the international community and improve the country's external financing capacity;
4. It is conducive to enhancing a country's comprehensive national strength and its ability to resist risks in the international community.
The meaning of foreign exchange reserves
Foreign Exchange Reserve in English refers to a part of assets owned by a country in its central bank and other government financial institutions that can be converted into foreign currency at any time to meet its payment needs in the international community. Under normal circumstances, the main sources of foreign exchange reserves are the capital inflow to China and the trade surplus between countries. When these are concentrated in the central bank of China and government financial institutions, foreign exchange reserves will be formed.
Take China's foreign exchange reserves as an example. Its main component is not RMB assets, but US dollar assets. According to the data released by the State Administration of Foreign Exchange, at the end of the first quarter of 20 14, China's total foreign exchange reserves increased to 3.94 trillion US dollars.