I saw an answer about Venezuela before, and suddenly I realized what the foreign exchange reserves are. The dollar is the world currency and is the hard currency in the world. In addition to the United States can print dollars, other countries must sell some goods and services, such as the Philippine servants, Saudi oil, German cars, Korean cosmetics and so on. Either export to the United States for direct exchange of dollars, or export to other countries, and then these countries pay with the dollars they earn. So the dollar is ultimately from the United States.
So when you see this, you should understand how the foreign exchange reserves are going. The dollars you earn from exporting are foreign exchange reserves. Similarly, if you sell things to other countries (except the US), people also use their own foreign exchange reserves to pay.
As for what foreign exchange reserves are used for? Quite simply, you have to buy dollars in order to buy something from others because the dollar is hard currency. The dollars you use to buy things can only come from your foreign exchange reserves. You can't get the yuan directly to exchange dollars, because people don't accept the yuan, I just said that the dollar is hard currency.
In addition to the US dollar, gold is also hard currency, so gold reserves are also part of the foreign exchange reserves.So it is obvious to see here. Why does the US not need foreign exchange reserves?Because the United States itself uses the US dollar, people can buy things directly in dollars, and of course they do not need foreign exchange reserves.