The first is through the reduction of the size of foreign exchange reserves to achieve part of the foreign exchange reserves of the market-oriented private use. The basic idea is that the central bank to sell foreign exchange reserves to the public to recover the yuan, sold foreign exchange reserves remain in the hands of the public, by professional companies, departments or private independent management operations. For example, encourage enterprises to use their own yuan to buy foreign exchange, import foreign advanced technology, equipment and strategic materials, and the purchase price of foreign exchange can be based on the national strategic needs of the degree of urgency and importance to be different degrees of preferential. Another example is to promote the establishment of "strategic materials investment company" - through the issuance of shares and bonds from the private sector to raise funds to buy foreign exchange, and then by the strategic materials investment company autonomy to carry out the relevant operations. Have different views on the future price of strategic materials can be free to choose, who see "more" to buy the investment company's shares, who see "short" will not buy or even can sell short of the stock.
The second is the part of foreign exchange reserves belonging to the non-financial funds, rationally broaden the investment channels. The basic idea is to maintain the liquidity and security of foreign exchange reserves under the premise of taking a more active investment portfolio strategy to expand the use of foreign exchange reserves channels. Conservative investment is the European and American sovereign debt and financial debt, relatively active investment will involve other credit rating general securities, more active investment can involve corporate equity and real estate. In undertaking portfolio expansion, it is important to draw on international experience and make careful choices. To name a few ways of utilizing assets that have not been given enough attention. For example, in 1996, the country had foreign exchange reserves lent to commercial organizations by foreign exchange-designated banks, and may now consider doing so again to minimize losses from simultaneous high-interest borrowing and low-interest investments in U.S. Treasury bonds. Again, considering that developing countries are not satisfied with the loan procedures and conditions of the International Monetary Fund, part of the reserves can be taken out to issue loans to them. Then again, consideration could be given to transferring part of the foreign exchange reserves to other assets of the central bank to support financial reforms through capital injections and other means, and to explore the possibility of expanding the field of investment. But all kinds of investment is directly operated by the central bank or entrusted operation, it is necessary to weigh the advantages and disadvantages, good planning.
The third is the part of the foreign exchange reserves belonging to the financial funds, to explore the financial use, can be consumed or allocated. The basic idea is to let the central bank "mint tax" nature of foreign exchange reserves into fiscal funds. There are two ways to operate. First, the central bank to sell foreign exchange reserves to the public (although the appreciation of the yuan is expected, the public holding foreign exchange reserves willingness to decline, but the public for the purpose of asset diversification, there will still be a demand for foreign exchange), and then use the proceeds to buy treasury bonds issued by the Ministry of Finance, the Ministry of Finance to obtain the funds in yuan, as the fiscal funds to spend, but this approach to ensure that there will not be a second exchange settlement; Second, the central bank directly with foreign exchange Purchase of special treasury bonds issued by the Ministry of Finance, the Ministry of Finance thus obtained foreign exchange, can be spent as fiscal funds. China's government investment in infrastructure, education, medical care, social security, environmental protection and other aspects of the relatively low, the Treasury can use the foreign exchange received to import related materials and equipment.
Fourth is the fiscal use of foreign exchange reserves investment income. Foreign exchange reserves investment income part of the direct performance of fiscal revenue, can be used as fiscal funds.
Problems to be noted:
Foreign exchange reserve investment channels need to be expanded, but liquidity is still the primary consideration. There are several reasons for this. First, although in the appreciation expectations, foreign exchange reserves scale expansion can be self-fulfilling, but in the depreciation expectations, foreign exchange reserves will be self-fulfilling size reduction, need to be prepared for the emergence of depreciation expectations. Secondly, China's capital program is gradually open, the more liberalization of the capital program, foreign exchange reserves "to maintain confidence" in the "retreat" significance of the greater the liquidity of foreign exchange reserves can provide support for the exchange rate management policy confidence, as well as to provide support for the domestic monetary and financial system confidence. The confidence of the domestic monetary and financial system.
Curbing the continued growth of foreign exchange reserves and the use of reserves is equally important. Continued high growth of foreign exchange reserves can cause many problems. To South Korea's cost of implementing monetary policy, for example, South Korea's foreign exchange reserves have grown rapidly since 1998, the central bank synchronized the issuance of "currency stabilization bonds" back to the local currency, but the interest burden is getting heavier and heavier, leading to the central bank in 2004, a loss of 147.5 million U.S. dollars. Our current need to take comprehensive measures, including reducing the appreciation of the yuan is expected to strengthen the management of short-term capital inflows, smooth channels for foreign financial and direct investment, expanding the domestic industrial restructuring and technological progress can promote the import of commodities and technology in order to curb the scale of foreign exchange reserves to further growth, which is the same as the rational use of foreign exchange reserves is equally important issue.
Weakening the link between foreign exchange reserve growth and currency issuance. The ministry of finance with fiscal surpluses or the issuance of special treasury bonds to raise funds to the central bank to buy foreign exchange reserves. So that part of the reserves transferred from the central bank's balance sheet, can be used for capital injection into state-owned commercial banks, fill the gap in the social security fund and other public **** financial expenditure. The realization of part of the foreign exchange reserves managed by the financial sector can weaken the link between the growth of foreign exchange reserves and currency issuance, and enhance the initiative of China's monetary policy.