A Study On The Choice Of Security Currency Composition Of China’s Foreign Exchange Reserves

After the crisis, there is a sharp foreign exchange fluctuation in the Foreignexchange market. Any monetary mismatch will lead a huge risk to the Chinese foreignexchange reserve. It is a key mission to prevent and reduce risks through theadjustment of currency composition in the most recent period.Under the premise of the Markowitz mean-variance (M-V) analysis method andDynamic Conditional Correlation Multivariate GARCH model, we can get theOptimization of Currency Composition in the short-term and long-term that the sharesof Dollar, Euro and Yen should be30%-33%、23%-26%、41%-43%�'�30%-40%,20%-25%，40%-45%.as the result, the State Administration of Foreign Exchangeshould decrease the shares of Dollar, increase the Euro and Yen, and make the yen tobe the Front Rank currency, promote RMB nationalization and learn from the foreign.