Factors affect Whatis cashback forexexrebateg foreign exchange forexrebatenetwork International reserve dem bestforexrebate refers to the amount of What is forex rebate reserves that a countrys monetary authority is willing to use a certain amount of real resources in exchange for The main factors affecting the demand for international reserves are: How to make money with gold speculation expert free guidance bank gold and silver TD opening guide bank gold and silver simulation trading software set gold number desktop line price tool (a) the opportunity cost of international reserves The opportunity cost of holding international reserves, that is, the real resources held by the international reserves may bring the country the more international reserves held by a monetary authority, the greater the amount of real resources it gives up to be used: if a countrys monetary authority reduces the amount of international reserves held, the foreign exchange saved can be converted into real resources such as imported goods and services, for the countrys current The opportunity cost of holding international reserves is usually expressed in terms of the rate of return on investment of incoming I-1 resources that can be converted by foreign exchange funds The higher the rate of return on investment of imported resources, the greater the opportunity cost of holding international reserves Generally speaking, developing countries are more constrained by resource constraints in their economic development, and the rate of return on investment of incoming El resources (especially equipment, technology, and important raw materials) is higher. Thus, the opportunity cost of holding international reserves will be higher than that of developed countries (ii) The scale and frequency of external shocks One of the main reasons why countries need to hold international reserves is to cover the balance of payments deficit, and a countrys balance of payments deficit will be affected to some extent by external shocks, such as cyclical fluctuations in the world economy, changes in commodity prices, interest rates and exchange rates in the world market, changes in the structure of the world economy and Changes in the world political situation, etc. If such external shocks occur frequently and on a large scale, the country needs to hold more international reserves (iii) Governments policy preferences Holding international reserves is a government action, and the demand for it necessarily depends on the governments policy preferences Among the policy choices, those that have a greater impact on the demand for international reserves are: 1. Exchange rate policy If the government chooses a pegged exchange rate system; or in a managed floating exchange rate system emphasizes exchange rate stability, it needs to hold more international reserves to enhance the ability to intervene in the foreign exchange market 2. focus on economic objectives if the emphasis on current growth, it can reduce the need for international reserves and convert foreign reserves into real resources for imports; if the emphasis on sustained growth, it needs to hold more international reserves to avoid the shortage of foreign exchange to affect imports and affect economic growth 3. direct The attitude of control If the government adopts strict direct control measures, it can rely less on the use of international reserves to balance the balance of payments, thus reducing the demand for international reserves accordingly (iv) the state of a countrys domestic economic development The balance of payments of a country depends to a considerable extent on the state of the countrys domestic economic development Among them, the factors that have a greater impact on the demand for international reserves are: 1. The rate of growth of the countrys economy If its economy is growing faster and its marginal propensity to import is higher, the country needs to hold more international reserves in order to support large imports. 2. When the price of imported goods rises, it is difficult to reduce the volume of imports significantly; when the price of exported goods rises, it is also difficult to increase the volume of exports rapidly. If its commodity prices are lower and it has higher international competitiveness in the commodity market, it can have less trade deficit situation and thus reduce the demand for international reserves accordingly If its interest rate level is higher and its capital market is more attractive to foreign capital, the country can also reduce the demand for international reserves accordingly (v) Scale of foreign interactions In a countrys international interactions, what has a greater impact on the demand for international reserves is the scale of commodity imports and the scale of external debt service A countrys imports The larger the size of a countrys imports, or the larger the external debt service burden, the greater the need to hold more international reserves (vi) The ability to borrow foreign funds In addition to using international reserves to cover the balance of payments deficit, a country can also reduce the need for international reserves by borrowing foreign funds This borrowing capacity includes both the governments ability to borrow from international financial institutions and other governments through international agreements, as well as The ability of private commercial banks to raise emergency funds in the international financial markets A countrys ability to borrow foreign funds depends to a large extent on its level of economic development, its economic system, the degree of financial market development and its international creditworthiness Generally speaking, the borrowing capacity of developed countries is stronger than that of developing countries, thus reducing the demand for international reserves accordingly (vii) The position of the countrys currency in the international monetary system (vii) The status of the countrys currency in the international monetary system, the reserve currency-issuing country can often use its own currency to pay off international debt, which can correspondingly reduce the demand for international reserves (viii) International coordination of national policies