Active Management Of RMB Exchange Rate Fluctuation Risk

Since the P reform in 2005, the ability of domestic enterprises to adapt and manage exchange rate risks has been greatly improved.

At present, apart from the spot trading of RMB and foreign exchange, there are RMB foreign exchange derivatives such as forward, foreign exchange swap, currency swap and foreign exchange option in the market.

Nowadays, more and more enterprises are using these tools to manage exchange rate risk.

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< p > 2013, the amount of RMB foreign exchange derivatives traded by banks was 17.4 times that of 2006, which accounted for 3.3% of the total volume of foreign exchange market from 19% in 2006 to 2013.

Of course, this exchange rate fluctuation also reflects the shortcomings of enterprise exchange rate risk management.

In the past, in the long term unilateral appreciation and low fluctuation of RMB exchange rate, enterprises mainly managed the risk of RMB appreciation, so a large number of long-term settlement were carried out, and there was no effective hedge against the exposure risk of foreign currency liabilities.

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After "P > a href=" http://www.91se91.com/news/index_cj.asp "> exchange rate < /a > fluctuation, some domestic foreign exchange loans or foreign debts borrowed from abroad may suffer foreign exchange losses.

But this fluctuation also gives a vivid lesson to the market.

Since March, with the increase of exchange rate fluctuations, more and more enterprises have begun to hedge the exposure of foreign currency liabilities in the early stage, which has increased the forward purchase of foreign exchange. In March, the average daily forward purchase of foreign exchange contracts increased by 34% over the previous two months, while the forward settlement of foreign exchange contracted by 36%.

This is the main reason for the sharp drop in the surplus of forward sales and sales in March.

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< p > objective and comprehensive understanding of the role of exchange rate hedging tools.

When engaging in foreign trade and economic exchanges, enterprises must have foreign exchange exposure if they are denominated in foreign currencies, so they will be faced with the risk of exchange rate fluctuations. Therefore, we should use some tools to manage this risk.

However, different trading strategies can produce different financial consequences.

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< p > > If a href= "http://www.91se91.com/news/index_cj.asp" > derivatives > /a > pactions are based on the actual trade and investment background, which is often referred to as the real needs, hedging risk hedging behavior is to help enterprises to make the uncertainty of exchange rate volatility into certainty, lock in gains or costs ahead of time, then enterprises can concentrate on production and operation; if there is no trade and investment background, and only pursue risky speculation, then once they see the wrong direction, they may bear the actual losses.

The development of the domestic RMB foreign exchange derivatives market has been focused on the service of the real economy, adhering to the principle that product innovation is compatible with the level of bank risk management and the risk tolerance of enterprises, so it is necessary to manage all kinds of derivatives pactions on the client side.

Recently, the fluctuation of RMB exchange rate may make the enterprises that have made long-term forward settlement at the high level of RMB exchange rate appear floating losses, but not actual losses.

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"P >" because for the a href= "http://www.91se91.com/news/index_cj.asp" > export enterprise < /a >, at the same time, the forward contract is signed and the export contract is signed according to the forward price, and then the production and operation are carried out in accordance with the locked income.

The loss of the performance of forward contracts is based on the opportunity cost of foreign exchange settlement at a better price. At that time, if we did not make forward settlement, we would have higher income at the spot price.

However, because the revenue was locked up according to the contract price, all production and operation were organized according to the contract price, which reduced the financial risk.

If there is no actual trade and investment activities, especially the offshore structured products, most of them do not have a real need background.

After the exchange rate fluctuations, these institutions may bear a certain pressure of liquidation. The higher the leverage, the greater the pressure.

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< p > speeding up the construction of foreign exchange market is very important.

In his the third Plenary Session of the 18th CPC Central Committee guidance report, President Zhou Xiaochuan clearly pointed out that we should expand the floating range of RMB exchange rate in an orderly way according to the development of domestic foreign exchange market and the economic and financial situation.

With the increase of the two-way floating elasticity of RMB exchange rate, the next step is to cultivate and develop the foreign exchange market in four aspects.

First, we should further enrich the trading products, increase the main body of the paction, improve the trading mechanism, expand the depth and breadth of the foreign exchange market, and increase market liquidity.

Two, we must adhere to the principle of marketable products, maintain fair trade, urge banks to fully disclose the risks of derivatives trading, sell appropriate products to suitable investors, and not exaggerate the function of products.

Three is to strengthen investor education, guide enterprises to establish a correct sense of exchange rate risk, and actively manage the risk of two-way fluctuation of exchange rate.

In addition, it is necessary to help enterprises correctly understand the role of exchange rate hedging tools, not to take exchange rate hedging as a tool for making money, but as a means to manage risks.

It is also a speculation to guide enterprises to carry out appropriate hedging with foreign investors.

Four, we should further enhance data pparency, expand the scope of disclosure of foreign exchange statistics, accelerate the frequency of data disclosure, and help market participants better identify and manage risks.

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