What does more or less forex mean for a country?

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

The first is to regulate the balance of payments and ensure external payments.

The second is to intervene in the foreign exchange market and stabilize the exchange rate of the local currency.

The third is to safeguard international credibility and improve the ability to raise funds for foreign countries.

Fourth, it is necessary to enhance comprehensive national strength and the ability to resist risks.

Not too much, not too little.

The main impact is in the import and export industry.

Take the renminbi and the U.S. dollar as an example, if the renminbi appreciates, the U.S. dollar pricing of our products exported to the United States will increase, which will reduce the advantage of our export products.

For example, in the past, when the RMB dollar was 1 to 8, the export products were sold at a price of 1 US dollar, and the exchange was 8 yuan.

Now it's 1 to 6, and you still sell it for 1 dollar, and when you get it back for only 6 yuan, you make 2 yuan less.

In order to earn 8 yuan, the product has to be priced at about US dollars, and the advantage of low price is gone.

Does that make sense?

If you want to study the foreign exchange trend, you can come to the group and learn together.

The foreign exchange market is not allowed to affect the economy of a country.

But a country's economy can dominate the forex market.

Therefore, investing in foreign exchange is investing in a country's economy.

It is also because foreign exchange is affected by the national economy, so there is no market maker for foreign exchange.

Different countries have different currency issuance mechanisms, so the impact is different.

For a very simple example, due to the existence of the Bretton Woods system, the development of the global economy is linked to the US dollar, if the exchange rate of the US dollar against China falls, that is, the US dollar depreciates and the RMB appreciates, so that China's US dollar foreign exchange holdings shrink a lot, that is, China's money in foreign exchange is less. In addition, changes in foreign exchange will cause changes in a country's export industry, China is an export-oriented country, exports have declined, so will China's economy not be affected? I hope it can help, don't listen to the one-sided words of ordinary people, and have a pair of eyes to see the deeper problems clearly.

The meaning of the existence of the foreign exchange market, simple examples:

You export goods to the United States, but you can't ask the Americans to pay you RMB, so you have to collect dollars from people first.

What if you want to invest in Japan with dollars?

Convert dollars to yen.

The foreign exchange market is the bridge of the world.

The value of the coin can be used to circulate the economic development of the country.

It's internationalized, it's getting better and better, and you can find it. Remit. Country. Border. Xiao Wu.

In the initial stage, it is still far, far from popularization.