What are the foreign exchange reserve assets of the People s Bank of China

The foreign exchange reserve assets of the People's Bank of China include financial assets, such as U.S. Treasury bonds, U.S. dollar foreign exchange, etc., as well as other ** asset investment

The foreign exchange reserves of the People's Bank of China are mainly composed of four parts: first, a huge surplus; second, a significant increase in net FDI inflows; third, the continuous increase in foreign loans; Fourth, the inflow of "hot money" caused by the expectation of RMB appreciation.

The functions of foreign exchange reserves mainly include the following four aspects:

First, it is necessary to adjust the balance of payments and ensure external payments.

Second, intervene in the foreign exchange market and stabilize the exchange rate of the local currency.

Third, it is necessary to maintain international credibility and improve financing capacity.

Fourth, enhance comprehensive national strength and resist financial risks.

A certain amount of foreign exchange reserves is an important means for a country to carry out economic adjustment and achieve internal and external balance. When there is a deficit in the balance of payments, the use of foreign exchange reserves can promote the balance of payments; When there is an imbalance in the domestic macroeconomy and the aggregate demand is greater than the aggregate supply, foreign exchange can be used to organize imports, so as to adjust the relationship between the aggregate supply and the aggregate demand and promote the macroeconomic balance. At the same time, when the exchange rate fluctuates, foreign exchange reserves can be used to intervene in the exchange rate to stabilize it.

Therefore, foreign exchange reserves are an indispensable means of achieving economic equilibrium and stability, especially when economic globalization continues to develop and one country's economy is more vulnerable to the economic influence of other countries.

Generally speaking, the increase of foreign exchange reserves can not only enhance the ability of macroeconomic regulation and control, but also help to maintain the credibility of the country and enterprises in the world, help to expand the international market, attract foreign investment, reduce the financing cost of domestic enterprises, and prevent and resolve international financial risks. The appropriate level of foreign exchange reserves depends on a variety of factors, such as the status of imports and exports, the size of external debt, and the actual utilization of foreign capital. Foreign exchange reserves should be kept at an appropriate level based on the benefits of holding them, the comparison of costs and the situation in these areas.

Foreign exchange reservesWhat's included?

Foreign exchange reserves are short-term deposits abroad or other means of payment that can be cashed abroad, including foreign valuables**, checks, promissory notes, foreign currency drafts, etc. It is mainly used to pay off the balance of payments deficit, and when the national currency is sold off in large quantities, the use of foreign exchange reserves** The national currency intervenes in the foreign exchange market to maintain the exchange rate of the national currency.

2. Foreign exchange reserves

Foreign exchange reserves, also known as foreign exchange reserves.

Refers to the ** banks of various countries in order to meet the needs of international payments.

and other ** institutions of concentrated foreign exchange assets. Foreign exchange reserves are an important part of the country's official reserve assets.

3. The role of foreign exchange reserves

1) The first purpose of foreign exchange reserves is to enable a country to cope with fluctuations in foreign exchange demand. At this point, the International Monetary Organization.

The IMF still follows the Triffin Rule, which they have held for more than 60 years. Robert Triffin was born in Belgium.

Yale University, which has a strong French complex.

Professor of economics, on World War II.

At the end of the day, the dollar's rampant movement in international settlements was quite dissatisfied. He believes that in order to ensure the foreign exchange needs of a country's imports and exports, it should maintain foreign exchange reserves equivalent to three to four months' total imports, so that the country will not have a large shortage of foreign exchange in imports and exports. China's foreign exchange reserves are clearly well above the level of Triffin's Law.

2) The second function of foreign exchange reserves is to ensure the foreign exchange demand for external debt repayment, specifically the country's foreign exchange reserves should be able to meet the foreign exchange demand generated by the maturity of short-term external debt and the non-extension of the creditor.

3) The third function of foreign exchange reserves is that they should be sufficient to cover the foreign exchange demand generated by short-term capital flows, including speculative capital flows. Because China's capital account is not open, theoretically speaking, international speculators cannot use the cross-border flow of capital to attack the yuan. In the short term, our reserves are sufficient to meet this need.

1. Currency composition.

The structure of China's foreign exchange reserves has not been explicitly disclosed to the outside world and is currently a state financial secret. It is estimated that US dollar assets account for about 70%, the yen about 10%, and the euro and pound sterling about 20%, according to a report from the Bank for International Settlements, Reuters and the proportion of currencies in China's foreign trade balance.

2. Specific forms.

**Short-term deposits abroad or other means of payment that can be cashed abroad, such as foreign valuable**, checks, promissory notes, foreign currency drafts, etc. from foreign banks. It is mainly used to pay off the balance of payments deficit and to intervene in the foreign exchange market to maintain the exchange rate of the national currency.

The composition of China's foreign exchange reserves is mainly foreign currency assets such as US dollar assets, yen assets, euro assets, and pound sterling assets, which are expressed in the form of bonds, equities, and currencies, and enjoy extremely high liquidity. Foreign exchange reserves are the foundation of a country's economic stability, so its selection is mainly based on the local currency of developed countries with stable currency value, and the proportion of other varieties is relatively small.

According to relevant statistics, China's foreign exchange reserves are now gradually diversifying above these currency reserves. In the currency structure of foreign exchange reserves, the share of the US dollar decreased from 79% in 1995 to 58% in 2014, while the share of non-US dollar currencies increased from 21% to 42% over the same period. And from 2005 to the end of 2018, China's ** reserve scale rose from 600 tons to 1,852 tons.

All of the above reflects the current good cooperative relations between our country and the rest of the world.

Generally speaking, foreign exchange reserves generally choose the local currency of countries with relatively stable currency value, because during the global financial crisis, these countries have stronger economic stability than the rest of the countries, and the stability of the currency value of foreign exchange reserves can in turn stabilize the value of their own currencies, making them more resistant to risks.

Extended Materials: General Classification.

According to the degree of restriction: it is divided into freely convertible foreign exchange, limited free convertible foreign exchange and booked foreign exchange.

Freely convertible foreign exchange is the foreign exchange that is most used in international settlement, can be freely bought and sold in the international financial market, can be used to pay off claims and debts in international finance, and can be freely exchanged for the currencies of other countries. For example, US dollars, Hong Kong dollars, Canadian dollars, etc.

Limited free convertibility of foreign exchange refers to foreign exchange that cannot be freely converted into other currencies or paid to a third country without the approval of the currency issuing country. The International Monetary Organization (IMO) stipulates that currencies that have certain restrictions on payments and transfers of funds of an international nature are limited freely convertible currencies. More than half of the world's national currencies are limited freely convertible currencies, including the renminbi.

Book-entry foreign exchange, also known as clearing foreign exchange or bilateral foreign exchange, refers to foreign exchange recorded in the bank accounts designated by both parties, which cannot be converted into other currencies and cannot be paid to third countries.

Foreign exchange, also known as physical foreign exchange, refers to foreign exchange that is used for import and export, that is, an international means of payment formed due to the international circulation of commodities.

Non-foreign exchange refers to all foreign exchange other than foreign exchange, that is, all foreign exchange that is not used for import and export, such as foreign exchange for labor services, remittances and donated foreign exchange.

Financial foreign exchange is different from foreign exchange and non-foreign exchange, which is a kind of financial asset foreign exchange, such as foreign exchange traded between banks, which is neither tangible or intangible, nor used for tangible, but for the management and arrangement of various currency positions.

billion dollars.

Extended Information:1The main component of China's foreign exchange reserves is US dollar assets.

According to data released by the State Administration of Foreign Exchange, at the end of the first quarter of 2014, China's total foreign exchange reserves increased to one trillion US dollars. It peaked at $3,993.2 billion at the end of June 2014.

2.Foreign exchange reserves, also known as foreign exchange reserves, refer to the foreign exchange part of the international reserve assets held by a country**, that is, the claims held by a country** in foreign currency, which are held by the monetary authority of a country and can be converted into foreign currency at any time.

As of the end of December 2020, the balance of the country's foreign exchange reserves stood at one trillion US dollars. At the end of December, the exchange rate of the renminbi was the renminbi against the US dollar. On March 7, 2021, data released by the State Administration of Foreign Exchange showed that as of the end of February, China's foreign exchange reserves were US$3,205 billion, a decrease of US$5.7 billion from the end of January.

So far, the scale of China's foreign exchange reserves has been above one trillion dollars for 10 consecutive months and above one trillion dollars for three consecutive months. The size of foreign exchange reserves has reached its highest level since 2017. As of the end of September 2021, China's foreign exchange reserves stood at US$3,200.6 billion, a decrease of US$31.5 billion from the end of August.

As of the end of December 2021, China's foreign exchange reserves were US$3,250.2 billion, an increase of US$27.8 billion from the end of November, an increase of about US$33.6 billion in 2021. As of the end of February 2022, China's foreign exchange reserves were US$3,213.8 billion, a decrease of US$7.8 billion from the end of January. Chinese name:

China's foreign exchange reserves; Other names; Foreign exchange reservesmain components; U.S. dollar assets are mainly held in the form of U.S. Treasuries and agency bonds.

China's foreign exchange reserves are mainly composed of US dollar assets, which are mainly held in the form of US Treasury bonds and agency bonds. Based on the Bank for International Settlements report, the Reuters report, and the share of each currency in China's foreign trade balance, it is estimated that about 70% of assets are in US dollars, 10% in Japanese yen, and 20% in euros and pounds.

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