What are the implications if China use a small portion of its foreign reserve for domestic affairs?

Question

Will it cause Reminbi to appreciate?

Answer 1

Since the reminbi is pegged by the Chinese government, it appreciates or depreciates (with respect to other currencies) only when the government says so.

As it happens, China is already seeing significant inflation. Additional government spending would increase demand, stimulate the economy still further, and hence make inflation worse.