The Research On The Appreciate Scale Of Chinese Foreign Exchange Reserves

Foreign exchange reserves is the core of the international monetary system, is also animportant part of the field of international finance. It relates to the countries ability to adjustthe balance of payments and exchange rate stability has always been a great concern of theinternational financial institutions and national governments. Sufficient foreign exchangereserves that a country has sufficient foreign exchange market intervention and the ability tomaintain the exchange rate; However, the scale of a country’s foreign exchange reserves aretoo large, tend to weaken the effect of economic policy, a certain impediment to economicdevelopment. Appropriate scale of foreign exchange reserves to maintain a country’seconomic stability is essential.Multiple foreign exchange system reform in1994, foreign exchange reserves grew rapidlyand foreign exchange reserve reached2.8473trillion U.S. dollars as of the end of2010, thelargest in the world. How to maintain a modest foreign exchange reserves, foreign exchangereserves, moderate size determine how to safely and effectively manage such a large foreignexchange reserves have become an important part of the management of foreign exchangereserves total.This article is based on foreign exchange reserves to an appropriate scale for the study,from the basic theory of foreign exchange reserves, research the current Chinese foreignexchange reserves, moderate scale, and offer advice on how to strengthen the foreignexchange reserves management. The paper first establishes the meaning of the foreignexchange reserves, moderate scale, and then introduced the basic situation of China’s foreignexchange reserves, and its rapid growth, and the macroeconomic impact analysis. Subsequentto the demand of foreign exchange reserves as the starting point to quantify the direct impactfactors, build the defining equation of foreign exchange reserves, moderate scale, empiricalanalysis of the1994and2008China’s foreign exchange reserves, analysis results show that:In recent years China’sforeign exchange reserves are too large. Finally, the problems in theforeign exchange management process, and suggested that under the current internationalfinancial crisis is not over yet, despite the foreign exchange reserves, large scale, is still unfitfor use drastic measures to adjust the foreign exchange reserves, but should reasonablearrangements for the excess, and deepen the foreign exchange management system, andpromote the RMB exchange rate formation mechanism reform and improve the liquidity of foreign exchange reserves and strengthen the external supervision, strengthen the scale offoreign exchange reserves management.