Export Enterprises' Flexible Experience In Exchange Rate Changes

The change of exchange rate involves the foreign trade risk of export enterprises.

In this regard, the heads of several export enterprises in Quanzhou have discussed many countermeasures. Some of them have been tested in practice and are considered effective.

Tip 1: signing a hedge agreement, at present, more and more export enterprises adopt "forward sale and purchase", that is, enterprises and banks carry out long-term settlement according to the current exchange rate, thus locking risks.

This method is especially suitable for enterprises with long production cycle. After the date of shipment is confirmed, enterprises can immediately apply to the bank for price locking and sign a hedging agreement for products.

In this way, the profit will remain unchanged for an enterprise within the agreed period, regardless of whether the exchange rate rises or falls.

Experienced industry insiders believe that on the way of settlement, export enterprises should adopt spot settlement as far as possible, such as sight letter of credit (L/C), and if T/T is adopted, the proportion of deposit should be increased as much as possible.

In terms of telegraphic pfer, most enterprises first collect the total amount of 30%% as the deposit, and the remaining part is paid after the bill of lading is issued.

In order to avoid exchange rate risk, enterprises should increase the proportion of deposit, such as 50%% or even more.

Tip two: change the currency of the settlement. According to the analysis, the magnitude and trend of exchange rate changes are different due to the differences in relative currencies. Therefore, enterprises can change the way of single settlement in dollar terms instead of the US dollar for international settlement.

For example, goods exported to European Union countries can be settled in euros, and goods exported to Korea can be settled by Korean won to spread risks.

If the buyer is an EU country, the enterprise can quote the euro to the customer and sign the purchase contract based on the euro price.

In the light of current practice, most buyers from EU countries can accept such quotations.

Tip three: the "dismantling" industry believes that the magnitude of exchange rate changes is often related to the time span involved in orders.

Therefore, when placing orders, enterprises should receive more than 3 months of delivery of short-term orders, try to avoid long-term orders.

For the unavoidable long-term orders, enterprises can take the form of "dismantling", that is, the signing of bills by stages, so that the price of products can be signed separately.

In terms of quotation, it is better for an enterprise to give the customer an effective period, and that if the exchange rate fluctuates too much, the price will be adjusted accordingly.