There are different participants in foreign exchange transactions, such as countries, commercial organizations and individuals. Countries conduct foreign exchange transactions for many purposes, such as balancing trade risks and balancing their own currencies. Commercial organizations also have many purposes, such as making profits, trading and avoiding risks. In addition to profit, there are also some actual foreign exchange needs, such as studying abroad.

As the world is a global village, exchange rate is very important for a country's trade and attracting investment. The change of exchange rate may worsen a country's trade and investment situation, so it is necessary for the country to intervene in the foreign exchange market and make its own currency properly convertible with foreign currency in order to achieve the goal of balance.

For example, in the financial crisis in Thailand, the Thai government took the initiative to devalue the Thai baht against the US dollar, which caused a greater wave of selling the Thai baht internationally, resulting in the devaluation of the Thai baht exceeding twice the Thai government's expectation. At this time, the Thai government was unable to sell dollars to buy back its own currency, so it could only let the Thai baht continue to depreciate. However, the devaluation caused the international price of Thai products to plummet, and the Thai people suffered heavy losses, and the continuous withdrawal of international investment from Thailand made Thailand worse.

China is now rich in RMB reserves, which means that in the future, China can sell its US dollar reserves in the market for RMB resources. However, since RMB is not a currency in international circulation, the huge reserves have caused the appreciation pressure of RMB.