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How does the exchange rate of foreign exchange market affect a country's foreign exchange? Why use foreign exchange reserves to buy local currency when the exchange rate falls?
The final transaction price in the foreign exchange market is the real-time exchange rate.

So it is no different from buying and selling stocks, futures or even toilet paper.

If more money is spent in dollars to buy RMB than in dollars to buy RMB, the former will keep pushing up the exchange rate when a deal must be reached, so the RMB will appreciate.

No matter what the underlying fundamental factors are, the difference in funds is the only influencing factor, which is specific to the last step of exchange rate changes.

The second question is simple. The falling exchange rate indicates that more funds are selling local currency to buy foreign currency, so the central bank will pull the exchange rate back in turn.