Empirical Analysis Of The Influence Factors Of Chinese Foreign Exchange Reserves

Foreign exchange reserve is to point to in order to meet the requirements of international payments, concentrated by central Banks and other institutions of government to grasp of foreign assets. Chinese foreign currency assets since1990began to break through$10billion, up to now China’s foreign exchange reserves have been ranked economy first in the world. The increase of foreign exchange reserves can not only enhance the ability of macroeconomic regulation and control to the whole market in China, and is conducive to safeguarding national and enterprise’s international reputation, at the same time has a great role on the development of international trade. In addition, reserves can also reduce the domestic enterprise financing costs, the guard against and defuse financial risks. However high foreign exchange reserves also brings negative effects, such as a high opportunity cost, increased the risk of capital gains. This requests us to analyze the influence factors of foreign exchange reserves.Like other economic variables, a country’s foreign exchange reserves are influenced by many factors, and the role of economic factors tend to be complex interweave Inspects each single factor’s influence on the foreign exchange reserve level there are statistically significant, but there’s no economic sense; If only choose some major factors modeling likely couldn’t reveal the action mechanism between variables, model will lose its practical significance.On the basis of predecessors’ research results, I chose7variables as impact factors, they are foreign direct investment, foreign exchange, the nominal interest rate, balance of national debt, the money supply, balance of import and export, tourist foreign exchange income. This paper use principal component analysis and regression analysis methods for the empirical analysis, t Research result shows that the influence factors of Chinese foreign exchange reserve scale has three, the first reason for the openness of China’s economy, the second factor is the exchange rate policy, the third factor is the interest rate factor. Among them, the openness of China’s economy is the most direct and the factors influencing the degree of the largest; Exchange rate policy can not only directly affects the size of the foreign exchange reserves, can also be affected by import and export the difference, and that foreign exchange reserves; And domestic interest rates is indirect and factors influencing the degree of the smallest. The implications for Chinese foreign exchange reserve scale factor research provides a new train of thought, as the macroeconomic regulation and control to provide the direction of foreign exchange reserves. At the same time, in this paper, the research train of thought provides a new reference for the study of complex influence factors in the social economic activities.