Why does RMB appreciate when foreign exchange reserves are high?

1, foreign exchange reserves are large and purchasing power is strong, which is the result of trade surplus. The goods in our country have always been low-priced and occupy a relatively large share in the international market. When the long-term trade deficit of other countries (that is, high prices) leads to the lack of market competitiveness or financial crisis of other countries' commodities, other countries' currencies will depreciate in order to develop their own economy.

2. At this time, a large amount of foreign exchange in China is at risk of foreign exchange depreciation. On the contrary, foreign exchange depreciation is our domestic appreciation, so our country is only facing the pressure of currency appreciation. Currency appreciation is a symbol of a country's prosperity, but excessive appreciation and endless currency appreciation can easily be used by national speculators to profit from it, and then withdraw funds after making money, leading to the decline of the national economy. This is the so-called economic bubble. How to avoid this kind of thing depends on monetary policy.

3. Simply put, the high foreign exchange reserves mean that China has a large trade surplus, so the voice of RMB appreciation is very high. Foreign investors bought RMB for arbitrage, which indirectly pushed up RMB. Coupled with China's exchange rate reform, RMB foreign exchange fluctuations have increased. This eventually led to this result, but what the landlord said was not causal logic. Is produced under certain conditions.

4, a country's economic development, its foreign exchange reserves should be balanced. Excessive trade surplus and trade deficit are the causes of the financial crisis.