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Let's say a country need 8 billion dollars for reserve. It has 10 billion dollars of foreign exchange reserve, but also with 9 billion dollars of foreign debt or even more. So the remaining net foreign exchange reserve is 1 billion dollar.

Does it mean the country is in the brisk running out of reserve, despite the high reserve of 10 billion dollars on the book? Since it has to use the 9 billion dollars in them to pay the debt?

This is the reserve of China, the blue line is total reserve, red line is total foreign debt, the purple line is net reserve. Does it mean China is running out of reserve it can use?

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  • $\begingroup$ Please clarify your specific problem or provide additional details to highlight exactly what you need. As it's currently written, it's hard to tell exactly what you're asking. $\endgroup$
    – Community Bot
    Commented Jan 4, 2022 at 4:00

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It does not mean China is running out of reserves. The debt almost certainly has a much different maturity profile than the reserves. The debt can be repaid over a long period of time and China could acquire more foreign exchange if needed.

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