| Since China's foreign exchange administration reform in 1994,its foreign exchange reserve keeps on increase rapidly. At the bottom of 2004,the scale of our country's foreign exchange reserve has reached more than 600 billions US dollars, increasing 51 percent than the same time of last year. China now is the second largest foreign exchange reserve holder in the world. It gets the attention of the whole world that our foreign reserve keeps on increase on the base of huge scale. Plenty of foreign exchange reserve enhances our county's economy strength and international status, stabilizes exchange rate of RMB. But at the same time, it also brings negative influence to our county's economy, and restricts economic development. Researching on the scale of foreign exchange reserve can know China's macroeconomic status. Moderate scale of foreign exchange reserve is very important to economic development. This paper focuses on the foreign exchange reserve scale of China, study reasonable reserve scale of China nowadays and the selection of policy. At first this paper introduces the general knowledge of foreign exchange reserve and theoretical summary related to foreign exchange reserve. Then, referring to relevant model, a new moderate determination model is constituted according to the reasonable demand of the foreign exchange reserve and other factors. This model adapts to practical status of China. It is used to analyze China's 1990—2003 foreign exchange reserve. The result shows that foreign exchange reserve is excessive after analyzing. Base on this result, the causes of foreign exchange reserve's increase and negative influences are deeply analyzed. At last, the author points out it should not adopt extreme policy adjustment, although current scale of foreign exchange reserve is large then normal. The author puts forward related policy measures and reformable advice to alleviate side effect of foreign exchange reserve and assure economy's normal move. |
