Abstract: Since China joined the WTO for more than six years, its foreign trade has developed rapidly, and more and more enterprises have entered the international market. Since the exchange rate reform began in July 2005, the RMB exchange rate has been rising all the way, and it has entered the "6" era, and export enterprises will face greater exchange rate risks. This paper analyzes the exchange rate risk faced by export enterprises from three aspects, and puts forward the measures that export enterprises should take in the face of exchange rate risk on how to use financial derivatives.
[Keywords:] RMB appreciation export enterprises exchange rate risk financial derivatives
I. Introduction
After China's entry into WTO, its status as a big trading country has been continuously improved. On July 4, 2008, the central parity rate of RMB against the US dollar was 6.8529, hitting the fifth1new high in one fell swoop. So far, the central parity rate of RMB against the US dollar has appreciated by nearly 6.2% compared with the end of 2007. At present, China's export enterprises are also actively coping with exchange rate risks. A survey conducted by the Monetary Policy Department of the People's Bank of China shows that the exchange rate hedging methods of China enterprises are more diversified than before the exchange rate reform, and their adaptability to exchange rate fluctuations has also been enhanced.
Second, the exchange rate risk of export enterprises
Exchange rate risk refers to the possibility that the value of assets or liabilities denominated in foreign currencies of economic entities and individuals will change due to exchange rate fluctuations. Exchange rate risk includes: transaction risk, conversion risk and economic risk.
1. Transaction risk refers to the possibility that economic entities will suffer losses due to changes in foreign exchange rates in transactions denominated and received in foreign currencies. Transaction risks mainly occur in: (1) risks in the import and export of goods and services. (2) Risk of capital input and output. (3) Risks of foreign exchange positions held by foreign exchange banks.
2. Translation risk, also known as accounting risk, refers to the possibility of book loss caused by exchange rate changes when the economic entity converts the bookkeeping base currency into the bookkeeping base currency in the accounting treatment of the balance sheet. The functional currency here refers to various currencies circulating in economic entities and business activities, and the functional currency refers to the reporting currency used in the preparation of comprehensive financial statements, usually domestic currency.
3. Economic risk, also known as operational risk, refers to a potential loss caused by unexpected exchange rate changes affecting the production and sales quantity, price and cost of an enterprise, resulting in a decrease in income or cash flow of the enterprise in a certain period in the future.
Third, the exchange rate risk analysis under the condition of RMB appreciation
When the local currency appreciates, export-oriented industries with high foreign currency assets and industries that rely on price strategy to compete face great exchange rate risks. Exchange rate risk is becoming a "new cost" for enterprises.
The appreciation of RMB is a long-term positive for industries with high import proportion and large foreign debt scale, but it has a greater impact on export-oriented industries with high foreign currency assets. Silk, textile and clothing, agricultural products processing and other industries are most vulnerable to the appreciation of RMB because of their low added value and thin profits. The data shows that for every appreciation of RMB 1%, the sales profit rate of textile industry decreases by 2% ~ 6%.
The appreciation of RMB has a great impact on those enterprises that mainly rely on price strategy, such as home appliance industry, but the impact on various sub-sectors of home appliances is different, from light to heavy, such as air conditioning, lighting, mobile phones and color electronics industries; According to the data, home appliance enterprises generally adopt the form of closed contracts when signing export orders, which has obvious negative impact on the export profitability of each company in the short term; In the long run, on the one hand, the bargaining power of home appliance exporters and international home appliance giants and distributors is limited, which makes the increase of export prices not reach the increase of RMB after each appreciation; On the other hand, the price adjustment action is always after the appreciation of RMB; Therefore, the export profit level will be suppressed for a long time; In addition, the appreciation of RMB will further worsen the living environment of small and medium-sized household appliances enterprises whose main market is export.
Four, export enterprises to deal with exchange rate risk measures
The key for enterprises to avoid exchange rate risk is to choose reasonable hedging tools and products. These include directly locking exchange rate risks with counterparties through agreements, or using bank-derived hedging instruments such as forward settlement and sale of foreign exchange and RMB swap business, and using products such as trade financing, derivative transactions and time deposits.
1. Strive for non-USD quotation, shorten the validity period of quotation and lock the trading risk. Foreign importers generally settle in US dollars, and they are more willing to pay in US dollars in the expected environment of RMB appreciation against the US dollar. But let customers understand our difficulties and quote in euros or yen, so that more customers can accept non-US dollar quotations. Shorten the previous normal monthly price of 1 ~ 3 months to 10 days to 15 days, and then adjust the price according to the actual exchange rate when it expires. In addition, when signing an export contract, relevant clauses should be added to the foreign trade contract, stipulating that if the exchange rate changes beyond a certain range, the proportion of losses caused by the exchange rate changes should be agreed in advance, and the risk of losses should be shared by both parties.
2. Forward settlement and sale of foreign exchange locks in accounting risks. In view of the rapid appreciation of RMB, financial instruments in exchange rate can be used to manage risks. Specific methods include the fixed cost or income of financial instruments such as forward foreign exchange transactions, currency options and exchange rate futures to avoid exchange rate risks. Enterprises adopt the method of forward settlement and sale of foreign exchange, and can finalize the exchange rate in advance for the foreign exchange receipts and payments that will occur in the future. There is no need to pay any handling fee for handling the foreign exchange settlement and sale business, only the applicant needs to provide a deposit of 3% of the transaction amount. As long as the settlement price is higher than the expectation of appreciation, the risk of RMB appreciation can be successfully avoided.