A Research On The Efficiency Of Foreign Exchange Reserve Management

From the global perspective, the world's foreign exchange reserve increase dramatically in recent years. Most of the increase is contributed by the East Asian countries. At present, the share of East Asia's foreign exchange reserve have accounted for more than 70% of the world. It soon becomes the gather area of the world's foreign exchange reserve. While, China's foreign exchange reserve reached 941.115 billion dollars up to June 2006.Its scale is not only bigger than Japan and also ranked first in East Asia, even though in the world. Chinese foreign exchange reserve will exceed 1 trillion dollars soon if it has the same growth rate in the future. But more foreign exchange reserve is not better. As far as the foreign exchange reserve above, such high reserve will bring many problems. Such as: foreign exchange reserve accounting, coordination of excessive reserve with domestic policies especially monetary policy etc. The most important problem is a tremendous opportunity cost and we should pay more attention to it. This will not only increase the risk of foreign exchange reserve, but also it will impact the efficiency of the foreign exchange reserve management. So, how to use foreign exchange reserve effectively, reduce risk and then improve the management of foreign exchange reserve has become a matter of high priority. Strengthening management of foreign exchange reserve is also an urgent issue, particularly in the form of a single and low efficiency circumstances in China. The author analyses how to improve efficiency of foreign exchange reserve based on structure management and management system in the empirical method. The paper includes four parts.The first part is theoretical preparations; mainly introduce the current state of academic studies from structure management and management system...