How do foreign exchange reserves affect the balance of payments
For example, if China's balance of payments is a surplus, then there will be a foreign exchange surplus, which can be used to buy foreign goods and pay for them (the balance of payments includes the relative differences between countries such as foreign trade and capital), then the foreign exchange surplus will be gone and the balance of payments will be balanced! If it is a deficit, there will be room for imagination for the loss of foreign exchange reserves, and exports will decrease relative to imports. Then we can use the foreign exchange we have to intervene in the exchange rate market, so that our country's exchange rate will decline relative to trading countries, which is beneficial to our foreign trade exports!