| Since the twentieth Century in the early 1990s, emerging market countries have experienced the stupendous tide inrush of international capital and the BRICS as the represents of emerging market countries are no exception accompanying with the growth of foreign exchange reserve of the BRICS excluding South Africa and large-scale growth came especially after 2000, far more than the normal demand. However, the foreign exchange reserves is not the more the better and it is a "double-edged sword". It can maintain financial stability of a country,improve investment confidence and promote economic development, however, excessive foreign exchange reserves will also bring risk and loss to the economic operation and development of the nation, such as the risk of inflation,exchange rate and interest,offset cost,opportunity cost and the loss of preferential loans provided by international organizations.Therefore, it has important theoretical and practical significance that studying the reasons for the rapid growth of foreign exchange reserves of the BRICS excluding South Africa, controlling the growth rate and scale of foreign exchange reserves and improving the management level of foreign exchange reserves.This paper attempts to study the factors affecting foreign exchange reserves from the perspective of theory of demand motivation and put forward a framework of comprehensive theory based on demand motivation;and then the scale characteristics of the BRIC foreign exchange reserves shows that Brick foreign exchange reserves has experienced rapid growth and shows exhaustively, then analyzes the various risks of excessive foreign exchange reserves, and based on this situation and the economic and financial characteristics of the Bricks, it will mine deeply causes of their massive scale of foreign exchange reserves in recent years; secondly, in the empirical research, correlation analysis is used and it confirms that the foreign exchange reserves of Brick countries has common tendency, based on this, this paper selects common factors affecting the foreign exchange reserves from the demand perspective and uses panel data model to test, the empirical results shows that competitive motivation is clearly a common factor promoting the foreign exchange reserves of the four country, but the main factor is different and the greatest impact based on demand motive to promote foreign exchange reserves of Brick is as follows:Brazil -the trading motive and the preventive motive; Russia-competitive motive and trading motive; India-competitive motive and preventive motive; China-the development of motivation and competitive motive. Finally, aiming at the causes of the Brick countries accumulating foreign exchange reserves, the paper attempts to put forward policy proposals to alleviate the scale of foreign exchange reserves, such as the optimization of its own industrial structure; the improvement of the utilization rate of foreign investment to ease foreign capital inflows; deepening economic and financial cooperation, enhance the ability to resist the financial crisis. Then, it can be used that the strengthening of the management and rational use of foreign exchange reserves to directly reduce the stock of the already huge foreign exchange reserves. |
