The so-called foreign exchange reserve, also known as foreign exchange reserve, refers to the foreign exchange assets held by central banks and other government agencies in various countries and can be converted into foreign currency at any time to meet the needs of international payment.
The functions of foreign exchange reserves mainly include the following four aspects:
First, adjust the balance of payments to ensure external payment;
Second, intervene in the foreign exchange market and stabilize the local currency exchange rate;
Third, maintain international reputation and improve financing ability;
Fourth, enhance comprehensive national strength and resist financial risks.