The Present Stage Foreign Exchange Reserve Management Research

Foreign exchange reserve is the main part of the International Reserve. The management of foreign exchange reserve is not only related to one country' ability to adjust the Balance of Payments and keep a stable exchange rate, but also to the sustainable development of economy of a country. The foreign exchange reserve has been developed very fast since the reform of the system of the foreign exchange management in 1994 in China. The total scale of it has surpassed 100 billion US dollars in 1996. In 2003 it has a rapid growth and had surpassed 300 billion US dollars. At the end of February in 2006 the total scale of it has reached 853.7 billion US dollars which has surpassed Japan for the first time and becomes the largest foreign exchange reserve holder in the world. According to the latest data, the total scale of it has reached 1332.6 billion US dollars until the end of June this year. How to improve the management of such a huge sum of Foreign exchange reserve? It is a subject which needs solving urgently in the field of Macro Economy.The essay is begun with the definition, source and function of foreign exchange reserve, based on the analysis of the change of the quantity and the management system of foreign exchange reserve in different historical stage in China, and makes a deep research for the reasons, the advantages and disadvantages of foreign exchange reserve which is increasing rapidly. Based on what referred aboved, the essay tries to give policy suggestions for the management of our country's foreign exchange reserve.This essay is divided into the five parts:Chapter one, introducing briefly the essay's writing background, research scope, research methods, innovations and shortcomingsChapter two, it is about the summary of foreign exchange reserve theory, including the definition and constitution of international reserve, the definition and source and function of foreign exchange reserve.Chapter three, by dividing different historical stage, using many statistic data, graph description and other empirical analysis methods, the essay summarizes the change of the quantity and the management system of foreign exchange reserve and their characteristics.Chapter four, firstly analyzing some main reasons of rapid increase of our country's foreign exchange reserve, then making advantages and disadvantages analysis of high foreign exchange reserve from the aspects of positive functions and harmful influences.Chapter five, from what discussed in the preceding chapters, the essay finally gives some policy suggestions for the management of our country's foreign exchange reserve from the angles of business and national economy.