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RMB Appreciation, Shoe Business Profits Less Than 3% Will Lose Half.

2010/9/25 16:24:00 48

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RMB Appreciation Shoe Manufacturers Shoes

Just as the market thinks the RMB exchange rate is slowing down, the RMB suddenly rises to 6.7 against the dollar.

On the 22 day, the latest data from the China foreign exchange trading center showed that in September 21st, the central parity of RMB against the US dollar rose by 6.7, to 6.6997, up 113 basis points from the previous trading day and rewriting the new record of the eighth consecutive trading days.

According to the Chengdu Commercial Daily reporter, since September, the appreciation rate of RMB against the US dollar has risen to 1.6%, which has brought a great loss to the shoe export with low profit margins.

8 new high ups and 6.79 months of appreciation 1.6%

Since September 10th, the appreciation of the RMB against the US dollar has been going all the way, and at a rate of over 100 per cent per day, it has set a new record in the 5 exchange rate reforms. On the two trading days last Friday and Monday this year, the RMB has also set a new high against the US dollar, but the intermediate price of the exchange rate has risen by only 9 and 72 basis points on the two day, to 1 yuan to 6.7110 yuan.

Just as the market thought that the appreciation of the renminbi slowed down, and may return to the tune, yesterday, the central parity of the RMB against the US dollar climbed 113 points, broke through the 6.7 pass in one fell swoop, and reported 1 yuan to 6.6997 yuan. In the eighth consecutive trading day, it hit a new high since 2005, and the 8 accumulated RMB appreciation rose by 820 basis points. Since September, the RMB has risen from 6.8105 to 6.6997 against the US dollar and has appreciated by 1.6%.

For the reasons for the sudden appreciation, Tan Yaling, Dean of the China Foreign Exchange Investment Research Institute, believes that the main reason is still affected by the depreciation of the US dollar. The early Yuan has once dropped to 6.8, and the rise of 6.7 is only a correction to the previous one. She also believes that the fluctuation of RMB has not surpassed the normal norm.

However, there are also analysts who believe that the recent US Congress has repeatedly pressed on the RMB, plus a large number of new foreign exchange holdings, which reached a peak in August, reaching 243 billion yuan.

Shoe companies will lose half of their profits by less than 3%.

From 6.8 to 6.7 points, the renminbi has appreciated to 1.6% against the US dollar since September, which has a huge impact on Sichuan's foreign trade enterprises.

"The most important thing is textiles.

Shoes and Hats

These industries with large export volume but low profit margins.

According to a person who has been engaged in export for a long time, he told the Chengdu Commercial Daily reporter that the appreciation of RMB will not only bring about the increase of price cost, but also weaken the competitiveness of export enterprises.

He pointed out that at present, the overall profit margin of the mechanical and electrical industry is 8%~10%, and the impact of RMB appreciation can also be digested. However, a lot of low profit textile and footwear exports will lose nearly half of its profits due to the sharp rise in foreign exchange.

A Chengdu, who does not want to be named.

Shoe enterprises

The boss told the Chengdu Commercial Daily reporter that although there was some mental preparation for the long-term trend of RMB appreciation, the recent short and vigorous appreciation was still very sudden. He calculated an account. The export profit margin of the company was less than 3%, and the appreciation of the RMB was 1.6%, which meant that the income of foreign exchange decreased by 1.6% again, and the profit loss was almost 50%.

And a head of the footwear industry, said:

footwear industry

The profit margin is less than 5%, most of it is around 3%. If it is gradual appreciation, it will have a controllable impact on export enterprises, while RMB appreciation in September will be 1.6%, which will bring a lot of losses to many export shoe enterprises.