Foreign exchange reserve, also known as foreign exchange reserve, means that in order to meet the needs of international payment, central banks and other government agencies can centrally manage foreign exchange assets and convert them into foreign currencies. Generally speaking, foreign exchange reserves come from trade surplus and capital inflow, while capital inflow and inflow are mainly concentrated in foreign exchange reserves formed by the national central bank.

The role of foreign exchange reserves is:

1. In international transactions, it has played a role in adjusting the balance of international payments and guaranteed the ability to pay abroad;

2. Intervene in the foreign exchange market and stabilize the local currency exchange rate;

3. Maintain the international reputation of RMB and improve its external financing ability;

4. Improve the country's comprehensive capacity and strengthen its ability to resist risks.

What is foreign exchange?

Foreign exchange refers to various means of payment expressed in foreign currency that can be used for international settlement fees. Simply put, it is foreign currency such as British pound, US dollar, Euro, Japanese yen, Canadian dollar, Australian dollar and Hong Kong dollar.