If the imbalance of international payments is caused by seasonality, accidental reasons or abnormal capital flow, changing the operation of domestic economy to eliminate this imbalance will have a negative impact on domestic economy. At this time, it is a simple and beneficial practice to adjust the balance of payments through the foreign exchange buffer policy. It can make the impact of external imbalance stop at foreign exchange reserves, avoid unnecessary fluctuation of local currency exchange rate caused by temporary imbalance, and be conducive to the smooth progress of domestic and foreign trade and investment without affecting domestic economy and finance. disadvantaged

First of all, the foreign exchange buffer policy can only be used to solve the temporary imbalance of international payments. For the long-term fundamental imbalance, the result of the application of this policy can not only solve this imbalance, but also accumulate a large number of problems, and finally make the domestic economy suffer a huge impact due to inevitable adjustment. Secondly, the application of foreign exchange buffer policy should also meet certain conditions, that is, it must maintain sufficient foreign exchange needed for the implementation of buffer policy and must have effective conditions for the implementation of open market operations. In fact, a country's foreign exchange reserves are always limited. Therefore, for those huge and long-term balance of payments deficits, it is impossible to use only foreign exchange buffers. Long-term use will lead to the depletion of foreign exchange reserves or the accumulation of a large number of foreign debts.