Can stabilize currency exchange rates.

According to the official China Foreign Exchange website, China’s large foreign exchange reserves can stabilize the currency exchange rate and keep the value of the RMB stable, so China has large foreign exchange reserves.

Foreign exchange is a claim held by the monetary administration (central bank, monetary management agency, foreign exchange stabilization fund and Ministry of Finance) in the form of bank deposits, Treasury bills, long-term and short-term government securities, etc. that can be used when the balance of payments is in deficit.