Foreign trade enterprises deal with exchange rate fluctuations in many ways

The recent fluctuation of RMB exchange rate has aroused widespread concern in the market. On May 24, the China Foreign Exchange Trading Center released data showing that the central parity rate of RMB was reported at 6.6566, an increase of 190 points, following a sharp increase of 731 points in the central parity rate of RMB on May 23. The central parity rate of RMB rose by nearly 1000 points in the past two days, which is also in contrast to the previous decline. In the face of wide fluctuations in the exchange rate, foreign trade enterprises have mixed feelings.
In response to this situation, a number of foreign trade related persons interviewed by the reporter said that on the one hand, we should help enterprises make good use of financial instruments to deal with short-term fluctuation risks; At the same time, actively use the window period to make a long-term layout in cultivating the overall capacity of the industrial chain and improve the comprehensive competitiveness of foreign trade.
Enterprises have both joys and sorrows under the fluctuation of exchange rate
Although the RMB has increased significantly recently, compared with the high spot exchange rate of the RMB against the US dollar in mid April, the depreciation rate is still more than 5%. Under the fluctuation of exchange rate, foreign trade enterprises have both joy and sorrow.
China party culture Holding Co., Ltd. benefited from the decline of exchange rate, and performed well in terms of order taking confidence and operating profit. "Now is the key time to compete with Southeast Asia and India for market share. We must seize the opportunity." Chen shengbi, chairman of the company, told the reporter of economic information daily.
The situation of some small and micro enterprises is not optimistic. In Zhejiang Yiwu International Trade City, the reporter felt more about the concerns of businesses about exchange rate changes. Affected by the conflict between Russia and Ukraine and the Fed's interest rate hike cycle, currencies in Africa, Latin America, Japan and South Korea accelerated depreciation, resulting in adverse expectations such as rising collection risk, rising raw material prices and falling demand.

"Before that, the RMB exchange rate against the US dollar fell 3000 basis points in half a month. Since this year, the New Zealand dollar has depreciated by 6.12%, the euro by 6.83%, the pound by 8.7% and the yen by 13.3%. Foreign trade enterprises have suffered serious exchange losses." The relevant person in charge of Yiwu Bureau of Commerce told reporters that exchange rate fluctuations caused losses and the export risk of small commodities increased significantly.

For import enterprises, the negative impact of the falling exchange rate is more obvious. "The previous goods were purchased with high exchange rate. When the selling price on the platform remains unchanged, the gross profit will be greatly reduced due to the decline of exchange rate." Liu aiming, general manager of haikelai company, a cross-border e-commerce platform, told reporters. Under the epidemic, the time difference between procurement and market price recovery is prolonged, which further exacerbates the uncertainty.
Financial institutions help avoid exchange rate risk
"Thanks to your advice, it's really dangerous now." The financial manager of Ganzhou Chongyi Zhangyuan Tungsten Industry Co., Ltd. sighed. Recently, while handling the cross-border direct loan business of US $7.5 million, the company accepted the suggestions of the local branch of the Bank of communications and avoided the risk of exchange rate fluctuation by purchasing and locking foreign exchange in the long term.
Facing the sharp fluctuation of exchange rate, it is particularly important for foreign trade enterprises to control risks by using financial hedging tools. The reporter learned that financial institutions have been stepping up the introduction of corresponding measures to help enterprises establish a neutral awareness of exchange rate risk and avoid the risk of foreign exchange rate fluctuations.
For example, China Merchants Bank has launched a number of transaction varieties, including forward hedging, value preservation and appreciation and option portfolio products. On the one hand, BOCOM helps enterprises establish and improve the exchange rate risk management system, on the other hand, it develops online foreign exchange treasury business functions such as "easy exchange".
Local governments are also actively carrying out financial supporting services. Yiwu passed the guarantee business scheme of "Yidan · exchange rate hedging" in March this year. At present, 25 banks in the city have joined, and 821 transactions of exchange rate hedging business have been handled with us $401 million.
However, the reporter learned in the interview that some small and micro enterprises still have great room for improvement in the use of exchange rate hedging tools. Gao Shiwang, director of the industry development department of China Chamber of Commerce for the import and export of mechanical and electrical products, told the reporter of the economic information daily that, on the one hand, small and micro enterprises lack professional guidance and relevant talents and do not understand the specific operation. In addition, at present, there are relatively few hedging related financial products for small, medium-sized and micro enterprises, and the threshold of foreign exchange hedging products of financial institutions is high.
A number of small and micro enterprises also reported that such a situation was encountered in the operation. Taking forward foreign exchange contracts as an example, a single transaction amount needs to reach hundreds of thousands of dollars before it can be used, which is difficult for small and micro enterprises to achieve. It is hoped that the follow-up policies can further strengthen the foreign exchange locking business for small and medium-sized enterprises and reduce the threshold of foreign exchange locking.
In response to this situation, the safe has begun to take action. Following the exemption of inter-bank transaction fees related to foreign exchange derivatives transactions of small, medium-sized and micro enterprises and the reduction of foreign exchange hedging operation costs of small and micro enterprises, the safe issued another document on May 20 to guide financial institutions to enrich the types of RMB foreign exchange derivatives. Continue to improve the service capacity of foreign exchange derivatives of grass-roots institutions, and strengthen the exchange rate risk management services for small, medium-sized and micro enterprises.
Combining long and short measures to meet challenges
Insiders pointed out that the two-way fluctuation of the exchange rate is the concrete embodiment of the marketization of the RMB exchange rate formation mechanism. For foreign trade enterprises, we should not only make good use of technical measures to meet the challenges of short-term fluctuations and improve risk resilience, but also make use of the long-term layout of the window period.
Wang Yang, chief foreign exchange strategist of Huijin Tianlu and deputy director of the finance, taxation and Finance Committee of China Association of foreign economic and trade enterprises, said in an interview with the reporter of the economic information daily that after releasing the energy previously accumulated, the RMB exchange rate may go out of a wide range of volatility for a period of time. "Both large and medium-sized enterprises should improve their awareness and ability to actively deal with exchange rate risks in order to effectively avoid risks."
The deputy director and researcher of the Institute of America and Oceania of the Research Institute of the Ministry of Commerce carefully suggested that under the current situation, for enterprises, a certain depreciation in the short term is conducive to exports. We should make good use of this window period, make long-term strategic deployment, increase the research and release Bureau of high-tech products, improve the knowledge and technology content of products, enhance competitiveness, and constantly optimize China's trade structure.
For enterprises involved in import, enhancing the domestic substitution rate of the industrial chain supply chain has become an effective path. Some enterprises have tasted the sweetness. Although Shengwei international mainly exports, some important parts need to be imported. In recent years, the development of domestic upstream and downstream industrial chain has greatly improved the localization rate of products.