Why do we still issue government bonds when we have a lot of foreign exchange reserves?

First of all, we must understand the relationship between foreign exchange reserves and national debt.

Foreign exchange reserves: are managed by the central bank; source: for example, remittances from foreign institutions, enterprises, individuals, etc., using US dollars or other countries’ currencies to exchange RMB with domestic banks. To put it bluntly, the central bank uses The RMB exchanged with foreign companies, etc., is not our own.

Treasury bonds: refers to bonds issued by a country’s government. The department that manages revenue and expenditure in a country is the Ministry of Finance; revenue mainly refers to taxation, and expenditures include many: military, civil servants and teachers’ salaries, social welfare, etc. wait. When revenue cannot meet expenditures, the Ministry of Finance needs to issue national bonds and borrow money from social institutions, enterprises and ordinary people.

If foreign exchange reserves are used domestically, it will cause currency depreciation, because the equivalent RMB has been given to those exchangers; if the money is used again, it will cause too much money and cause inflation. , prices have risen, returning to the situation before liberation when people used a sack of money to buy a box of matches.

Reference: The work of the old man in the cornfield, please indicate the source when copying