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.
2. Intervene in the foreign exchange market and stabilize the local currency exchange rate.
When the domestic foreign exchange market fluctuates due to various factors, the state can use sufficient foreign exchange to prevent excessive foreign exchange fluctuations from affecting economic development.
3. Enhance comprehensive national strength and resist financial risks.
With the continuous development of economic globalization, one country's economy is more easily influenced by other countries' economies. Without sufficient foreign exchange reserves, the economy will be easily affected by the international market.
Extended data:
Foreign exchange principle
1. Keep the currencies of foreign exchange reserves diversified to spread the risk of exchange rate changes.
2, according to the import of goods, services and other payment needs, determine the amount of various currencies in the reserve, term structure and the proportion of various monetary assets.
3. Pay close attention to the exchange rate changes of reserve currencies and adjust the proportion of reserve assets in different currencies in time or irregularly.
References:
Baidu encyclopedia-foreign exchange reserve