Exchange rate fluctuations will have an impact on import and export trade, and the appreciation of the local currency (in the short term) will inhibit exports and stimulate imports; The depreciation of the local currency will stimulate exports and is not conducive to imports.

Judging from China's existing economy, because a large part of the national economy depends on foreign trade, exchange rate fluctuations will have a great impact on China's economy, because a large number of domestic enterprises (not only a large number of small and medium-sized enterprises, but also many large enterprises) are in a relatively stable exchange rate for a long time, and their resistance to exchange rate fluctuations is very low, and some even don't have this concept, leading to a decline in profits, losses and even bankruptcy. Moreover, even if some large enterprises want to hedge, first, China's financial products are still far from perfect, and second, there are few talents in this field, so it still takes time. If the country suddenly opens up its space on the exchange rate, many enterprises will die miserably, leading to a large number of business closures, bad debts of banks and even economic depression. It's not worth it. The central bank might as well resist the pressure of a large amount of foreign exchange reserves and would rather suffer losses in currency.