The Research On The Factors Affecting The Growth Of Foreign Exchange Reserves Of BRICS Countries Based On Panel Regression

Since the Asian financial crisis,the BRICS countries have accumulated a large amount of foreign exchange reserves during 20 years,which not only closely affects their balance of payments,exchange rate stability and international credibility,but also plays a significant role in the smooth operation of the world economy.In recent years,the foreign exchange reserves of the BRICS countries have experienced a process of rapid growth,negative growth and basic stability.Studying the influencing factors behind them,scientifically considering the current situation of reserve scale,and further strengthening the correct guidance of the BRICS foreign exchange reserves have profound theories and Realistic meaning.This paper regards foreign exchange reserves as the result of the combination of market supply,market demand and central bank intervention.Based on the demand motive of foreign exchange reserves,balance of payments adjustment and central bank intervention,this paper sorts out the relevant theories of the influencing factors of foreign exchange reserves,and then establishes a comprehensive theory.Then,based on the description of the international status,quantity scale and growth trend,currency structure and term structure of the BRICS foreign exchange reserves from 2001 to 2017,this paper explores the common influencing factors of the growth of foreign exchange reserves of BRICS countries from the perspective of demand motive,balance of payments perspective and central bank intervention perspective.Among them,the influencing factors from the perspective of demand include the rapid growth of the economic and trade scale of the BRICS countries,the fragility of the domestic monetary and financial system,the international impact and the unsound international rescue mechanism;The influencing factors in the perspective of the balance of payments mainly refer to the situation of the surplus or deficit of the two major accounts of the balance of payments.According to the above three perspectives,we can construct an index system that affects the growth of foreign exchange reserves of BRICS countries,and use the factor analysis method to extract three comprehensive factors,which are summarized into economic scale,exchange rate system,and capital flow scale.The economic scale factor covers the original indicators such as GDP,total export volume,and broad money supply;the exchange rate system factor covers the official exchange rate and exchange rate fluctuations;the capital flow scale covers the original indicators such as total external debt.Finally,the panel regression test was conducted on the BRICS countries,and it was found that the three comprehensive factors explained the positive,negative and negative impacts on the growth of the overall foreign exchange reserves of the BRICS countries,and the degree of influence decreased.Based on this,the following four suggestions are proposed for the future management of foreign exchange reserves:First,the BRICS countries should maintain a moderate reserve scale to avoid substantial increase and decrease;second,adopt a sound export strategy to optimize the export structure;Third,optimize the currency structure and increase the utilization rate of foreign exchange reserve assets;Fourth,steadily push forward the reform of the exchange rate system of the BRICS countries and earnestly increase their exchange rate flexibility.