The accumulation of foreign exchange reserves will make the cost of export enterprises irreparable and bankrupt. At the same time, holding a large amount of foreign exchange reserves in the form of paper money opens the door for foreign exchange issuing countries to escape debts through inflation, which will lead to huge exchange losses of foreign exchange holding countries and bank bankruptcy.

Specific forms of foreign exchange reserves

Foreign exchange reserve ranking

According to the data at the end of April 2009, Chinese mainland's foreign exchange reserves ranked first in the world economy, second in Japan and third in Russia. It is estimated that 64% of the official world foreign exchange reserves of 1899 are mainly pounds. By 19 13, the value has dropped to 48%. As shown in the following figure, looking at the history of foreign exchange reserves, it is not difficult to find that the change base point of foreign exchange reserves is 100, and the proportion of US dollars as global foreign exchange reserves has also dropped from 72% in 1999 to 62% today. The changing trend of foreign exchange reserves will not last forever.

The following figure shows the officially announced changes in world foreign exchange reserves since 1999. The functions of foreign exchange reserves mainly include the following four aspects:

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

Second, intervene in the foreign exchange market and stabilize the local currency exchange rate;

Third, maintain international reputation and improve financing ability;

Fourth, enhance comprehensive national strength and resist financial risks.

A certain foreign exchange reserve is an important means for a country to adjust its economy and achieve internal and external balance. When the balance of payments is in deficit, the use of foreign exchange reserves can promote the balance of payments; When the domestic macro-economy is unbalanced and the total demand exceeds the total supply, foreign exchange can be used to organize imports, thus adjusting the relationship between total supply and total demand and promoting macroeconomic balance. At the same time, when the exchange rate fluctuates, foreign exchange reserves can be used to intervene in the exchange rate to stabilize the exchange rate. Therefore, foreign exchange reserves are an indispensable means to achieve economic balance and stability, especially when economic globalization is developing and one country's economy is more susceptible to the influence of other countries' economies.

Generally speaking, increasing foreign exchange reserves can not only enhance macro-control ability, but also help to maintain the international reputation of countries and enterprises, expand international trade, attract foreign investment, reduce the financing cost of domestic enterprises, and prevent and resolve international financial risks. The appropriate level of foreign exchange reserves depends on many factors, such as import and export, the scale of foreign debt, and the actual utilization of foreign capital. Foreign exchange reserves should be kept at a moderate level according to the comparison of income and cost and these conditions. Foreign exchange reserve is an internationally accepted foreign currency held by a country's monetary authorities to make up for the balance of payments deficit and maintain the stability of its currency exchange rate, and it is a part of international reserves. International reserves include foreign exchange reserves, gold reserves, ordinary drawing rights and special drawing rights of the International Monetary Fund (IMF). Foreign exchange reserves are the most important reserve assets.

Looking back on the development and changes of China's foreign exchange reserves: 1000 billion US dollars was exceeded for the first time at the end of 1996, and the reserves rose relatively steadily in the following four years. Since 2000, China's foreign exchange reserves have shown a rapid growth trend. By the end of 2005, it had increased to 81887.2 billion USD, ranking second in the world. In February 2006, China's foreign exchange reserves reached US$ 853.7 billion, surpassing Japan and becoming the largest holder of foreign exchange reserves in the world. By March of 20 10, China's foreign exchange reserves had reached 2,447.084 billion US dollars, ranking first in the world.

According to the data released by the People's Bank of China in July 20 14 and 15, China's foreign exchange reserves reached 3.99 trillion US dollars at the end of June. The subtle data of $0.0 1 trillion from the new integer mark reflects that China's huge foreign exchange reserves are undergoing a quiet and significant new change. Scale of national foreign exchange reserves (2000-2009) Unit: US$ 100 million 200 1 2002 2003 2004 2005 2006 2007 2008 2009 foreign exchange reserves1655.7438+021.

(A) China's foreign exchange reserves are too large, which increases the opportunity cost: the high foreign exchange reserves greatly increase the opportunity cost and reduce the effective utilization of capital. Foreign exchange reserves are deposited in foreign banks in the form of deposits. If it is not used for savings but for foreign investment, it can be used for import or investment, so the rate of return is much higher than that of savings, which constitutes the opportunity cost of foreign exchange savings. It can be seen that the more foreign exchange reserves, the greater the opportunity cost.

(2) The soaring foreign exchange reserves have affected the autonomy of monetary policy: under the condition of open economy, the change of a country's foreign exchange reserves is an important channel for money supply. A country's money supply is the amount of money issued by the central bank and then put into the market through various channels. Foreign exchange account is the currency invested by the central bank's foreign exchange reserves. At the same time, foreign exchange reserves have the nature of high-energy currency, which can double the money supply through multiplier effect. When China's balance of payments continues to show a surplus, there is an oversupply in the foreign exchange market.

(3) The current foreign exchange management system increases inflationary pressure: 1994 At the beginning of this year, China implemented a single exchange rate system, and while strictly controlling capital and financial projects, it also implemented a compulsory foreign exchange settlement and sale system for current projects. According to this system, in addition to allowing some foreign-invested enterprises to open foreign exchange cash accounts, Chinese-funded enterprises are also required to settle foreign exchange. Except for a few non-trade and non-operational income enterprises, foreign exchange income under current account must be sold to designated foreign exchange banks. Liquidation positions of designated foreign exchange banks are all approved by the People's Bank of China according to the actual situation, that is to say, the People's Bank of China is the biggest buyer in China's foreign exchange market. In the case of China's persistent trade surplus, the People's Bank of China can only buy excess foreign exchange, resulting in an increase in the base currency. Coupled with the role of the money multiplier, an excessive and abundant money supply is formed, which intensifies the inflationary pressure and is not conducive to the macro-control of the People's Bank of China.

(D) China's huge foreign exchange reserves face huge exchange rate risks: from the perspective of the international financial system, China's foreign exchange reserves have risen rapidly, but the structure is still dominated by US dollars. This makes China's economic growth achievements and future destiny bear huge exchange rate risks, especially the US dollar exchange rate risk.

(e) The relatively simple structure increases the reserve risk: at present, the US dollar accounts for a large proportion of China's foreign exchange reserves. Whenever the dollar depreciates or inflation occurs in the United States, China's foreign exchange reserves will depreciate accordingly, resulting in the loss of foreign exchange reserves. In today's economic globalization, due to the rapid and large-scale flow of international capital, the interest rate and exchange rate fluctuations in the financial market will be very fierce, so the exchange rate risk will increase. In addition, a country holding a large amount of monetary assets of another country will inevitably bring certain political risks. If Sino-US relations deteriorate, China is likely to face the risk that its dollar assets will be frozen, which will cause great losses to China's foreign exchange reserves.

(VI) The huge foreign exchange reserves have brought great appreciation pressure to the RMB, which makes the central bank need to use more means to maintain the stability of the currency: the expanding balance of payments surplus has caused an obvious imbalance between supply and demand in the foreign exchange market. Under the operation of China's foreign exchange management system and exchange rate policy, the result is the continuous accumulation of foreign exchange reserves, which makes the RMB face increasing appreciation pressure. In fact, although the emergence of RMB appreciation reflects the contradiction and conflict of international economic interests to a certain extent, it must be admitted that the existence of "double surplus" between current account and capital and financial account is the key and source of RMB appreciation pressure. However, the appreciation of RMB will inevitably have a negative impact on China's exports, and it will have a great negative impact on promoting employment and maintaining sustained and rapid economic development.