International Experience Of Management Regime Of Foreign Exchange Reserve

The 1000 billion exchange reserve of China on one hand can be the effective means of decreasing financial risks, and on the other hand, it brings heavy burden to the authority. That's because he expense of holding such huge exchange reserve can be very high. What's more, exchange reserve is not free saving of the central bank. Improper use of the exchange reserve can cause inflation, which really increases the degree of difficulty of monetary policy operation. In addition, with the development of the economy the speed of exchange reserve growth will not turn to slow. So it is imperative under the situation to change to positive exchange reserve management regime, which can maintain purchase power of the foreign exchange reserve over a long period of time instead of just spending it. The active management of foreign exchange reserve aim to stabilize long-term development and increase people's welfare level ultimately. Therefore exploration of suitable management regime for China is become one of vital issues to be solved.This paper illustrates the necessity of transformation of management regime of foreign exchange reserve at first. Then it shows the positive management of foreign exchange reserve from experience of Singapore, Japan, Korea and Norway. At last this paper concludes with suggestions on future management regime of foreign exchange reserve and some noticeable problem.