A Syudy Of Currency Compositions Of China Monetary Foreign Exchange Reserves

Till the end of 2017,the foreign exchange reserves of China have been up to 31399 billion dollars.Although such a large scale of foreign exchange reserves can guarantee an excellent international reimbursement ability,it also puts tremendous management pressure on our monetary authorities.Many studies indicate that US dollars account for a quite large percentage in our foreign exchange reserves,however,the continuous devaluation of US dollars recently would put our reserves assets at great risk,therefore,currency compositions management is becoming more and more significant.This paper takes monetary reserves as the object to analyze the optimal currency compositions under the constraints of security,liquidity and profitability.By teasing relative studies both from abroad and domestic,and the history of our foreign exchange reserves management,this dissertation finds out that multi-goal management(security,liquidity and profitability)has been becoming more and more prevailing,therefore,after analyzing the disadvantages of Asset Portfolio Theory,Heller-Knight Model and Dooley Model,this dissertation introduces Analytical Hierarchy Process(AHP),and builds the AHP model with the influential factors of trade structure,foreign debt structure,FDI structure and risk-return,to discuss the optimal currency compositions.Finally,we conclude that US dollar is the dominant reserve currency in our monetary reserves,accounting for 71.04%,while the euro,Japanese Yen and pound sterling take the percentage of 11.92%?9.23% and 3.46% respectively,that is to say,we cannot reduce the proportion of US dollar in the short term.As a result,the paper makes three suggestions to the appreciation of our foreign exchange reserves: during the short period,expanding the share of RMB cross-border settlement gradually to control the share of US dollar indirectly,during the interim,optimizing the investment structure of our foreign exchange reserves to improve the holistic yield of our foreign exchange reserves,during the long period,deepening the revolution of RMB exchange rate system and driving the process of RMB internationalization.