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下面为大家整理一篇优秀的assignment代写范文- Exchange rate risk in foreign trade，供大家参考学习，这篇论文讨论了对外贸易的汇率风险。在企业的外贸业务中，从最初的合同订立到最终的货款交付，一般都有一段较长的时间间隔，在此期间若外币升值，进口企业支付既定的外币数额要付出更多的本国货币；而若外币贬值，则出口企业收进既定数额外币结汇时可得的本国货币更少了。虽然以外币表示的款项数目没有变化，但反映到企业的收益水平上，汇率波动带来的损失可能远远超过企业进出口业务所获得的利润。

Import and export trade is a typical foreign-related economic activity. Enterprises have to accept and pay a large amount of foreign exchange or have claims and debts expressed in foreign currency in their foreign trade business. Therefore, the impact of exchange rate fluctuations on enterprises involved in foreign trade activities is more significant and direct, and they also face greater exchange rate risks.

In foreign trade business, from the initial contract to the final payment for goods, there is usually a long time interval. During this period, if the foreign currency appreciates, the import enterprises will pay more domestic currency for the fixed amount of foreign currency. And if the foreign currency depreciates, then the export enterprise receives the fixed amount of foreign currency settlement when the domestic currency is less. Although the amount of money expressed in foreign currency has not changed, the losses from exchange rate fluctuations may be far greater than the profits earned by the import and export business, as reflected in the income level of enterprises.

When the RMB appreciates and the exchange rate is fully transmitted, if the export price of China's exporters rises by the same degree as that of the currency appreciation, the export quantity will be reduced sharply in the case of greater price elasticity of demand for this commodity in the international market, which will lead to the loss of market share of export enterprises and the decline of earnings. If the exporter bears part of the profit cost of the currency appreciation and only partly raises the price of the export goods, it will directly lead to the decline of its export profit. They have to bear most of the costs of currency appreciation on their own, rather than passing them on to foreign importers. Therefore, the current background of continuous appreciation of the RMB has increased the risk of profit risk of export manufacturers and declining international market share.

In China, qualified enterprises have both RMB assets and foreign currency assets in their book assets, but their assets and liabilities in their comprehensive financial statements should be converted into RMB. The value of certain items in the balance sheet changes as a result of the change in the renminbi exchange rate. At present, the daily fluctuation of RMB to usd exchange rate is much smaller than that of non-usd currency exchange rate. For Chinese enterprises whose final financial results are settled in RMB, if they use non-usd currency for settlement, they will face higher exchange rate risk than usd.

The realistic pressure of RMB appreciation will have a great impact on the expectations of export enterprises and further affect their business development. In the case that the enterprise expects the RMB exchange rate to continue to rise, it may raise the price to ensure the normal profit. However, when the purchasing power of the currency of the importing country remains stable or there is internal devaluation, the result of the price increase will cause the enterprise to lose the majority of customers, which will lead to operational difficulties.

The change of RMB exchange rate may lead to the change of enterprise value. For example, for China's foreign trade enterprises, based on the level of corporate value, under the trend of unilateral appreciation of RMB exchange rate, the enterprise value measured by the present value of future dollar cash flow will be significantly reduced, which may affect the financing capacity and investment value of the enterprise.

After the reform of RMB exchange rate formation mechanism on July 21, 2005, RMB started to gradually appreciate, and the appreciation rate showed an increasing trend, thus the foreign trade exchange rate risk of Chinese enterprises gradually accumulated and amplified.

The degree of RMB exchange rate risk can be comprehensively reflected by the volatility calculated by variance and the range of currency movements. As can be seen from figure 1, after the slight fluctuations in the initial period of foreign exchange reform, the volatility of RMB exchange rate gradually increased. At the end of 2005, the daily fluctuation rate of RMB against usd was only 0.0001, and RMB exchange rate appreciated by only 0.5%. In 2006, the volatility rose rapidly to 0.005, and the RMB exchange rate rose by 3.4%. The volatility widened to 0.017 in 2007, and the yuan appreciated 6.9 percent. This means that, in 2007, if companies did not take any precautions against exchange rate risks, the appreciation of the renminbi alone reduced their profit margin by more than 6.9 per cent. From the end of 2007 to the end of February 2008, the yuan appreciated by 2.1% in two months. For domestic firms used to surviving on thin margins in international markets, the risk of a currency move is already alarming.

Compared with the one-way appreciation of the RMB against the us dollar, the RMB against the euro shows a two-way fluctuation. During the period from the beginning of 2005 to the end of 2007, the volatility of RMB against usd exchange rate was 0.07, while that of euro exchange rate was 0.15, indicating that domestic enterprises had higher exchange rate risk to European trade. In addition, the direction of the exchange rate of the RMB against the euro is not fixed, and the exchange rate risk is harder to confirm. Before November 16, 2005, the RMB exchange rate against the euro rose from 10.98 to 9.43, but since then, the RMB has been devalued against the euro. By the end of 2007, it has been devalued to 10.65 RMB against the euro, with a depreciation rate of up to 13%. That means that for domestic importers, whose currencies are denominated in euros, currency movements have pushed up import costs by 13%. Table 1 shows the statistical nature of these exchange rates.

Table 1 shows that there is a large gap between RMB and China's major trading partners in currency exchange rate fluctuations. The analysis based on standard deviation and variance shows that the fluctuation range of RMB and Hong Kong exchange rate is the smallest, and that of sterling exchange rate is the largest, and that of euro exchange rate is also relatively large, and that of usd and yen exchange rate is basically the same. Since these currencies are all used by China's major trading partners, the increase of fluctuation range is obviously a transaction risk that China's traders must face.

The above calculations only reveal the extent of the risk that has already occurred, and that the exchange rate risk that is to be faced in the future has a further upward trend. Judging from the domestic and international economic situation, the fluctuation range of RMB exchange rate will continue to expand, and the rate of appreciation will continue to accelerate. On the one hand, China's balance of payments surplus will continue to increase under the combined action of various factors. In spite of the rapid growth of domestic economy, it is constrained by social security, education and institutional constraints. Domestic demand is still weak. Increasing export is the main way to absorb domestic capacity. On the other hand, the international community continues to put upward pressure on China. In order to protect their own interests or transfer domestic crisis, European and American countries require China to relax the fluctuation of exchange rate and accelerate the pace of RMB appreciation through various channels. Under the strong international pressure, it is difficult for RMB exchange rate to maintain a slight rise. In addition, domestic tightening of monetary control and the resulting appreciation expectations will also push the renminbi higher. Therefore, the degree of exchange rate risk will rise in the future and become the primary risk in the foreign trade activities of enterprises.

From the current situation, the fluctuation of RMB exchange rate has no fundamental impact on the overall pattern of China's foreign trade. From 2005 to 2007, China's total import and export trade increased by 52.9 percent and the import and export trade surplus increased by 157.4 percent, which indicates that Chinese enterprises still have strong competitiveness in the international market. The advantages of labor force, natural resources and other elements of endowment to some extent offset the impact of exchange rate fluctuations. Despite the continuous appreciation of RMB against the us dollar, the cost advantage of Chinese enterprises is still obvious. Moreover, many enterprises are mainly engaged in processing trade. The appreciation of RMB not only increases the export cost, but also reduces the import cost of raw materials. On the other hand, it shows that Chinese enterprises have enhanced their ability to cope with market changes and can take reasonable measures to avoid exchange rate risks.

But the overall lull does not mask the local negative impact. Due to the large difference in trade patterns in specific industries, there are significant industry differences in the impact of exchange rate fluctuations. RMB appreciation is a long-term positive for industries with high import proportion and large foreign debt, but it has a great impact on industries with mainly export and high foreign currency assets. Among them, textile and apparel, agricultural processing and other low value-added, low profit export industries will be affected. Textile enterprises to the RMB appreciation of the capacity to continue to weaken. However, for those high technical threshold and capital industry, such as capital and technology intensive industries such as electronics, machinery, metallurgy, the relatively high profit margins in the industry, bargaining power is stronger, and can increase the right price in the contract clause risk aversion, the impact of the appreciation of the renminbi to its relative ease.

In addition, China's foreign direct investment has also increased rapidly in recent years, and its status in China's foreign economic cooperation has been improving day by day. China has introduced foreign direct investment on a large scale. On the face of it, foreign investment into China can get both investment returns and the gains of RMB appreciation. However, the risk brought by RMB appreciation has been reflected in the growth rate of foreign direct investment in China in the past two years. From 2004 to 2005, the actual use of foreign direct investment in China increased by 28%, while from 2005 to 2006, the value has decreased to 15%, and further decreased to 14% from 2006 to 2007. This suggests that a rising yuan does not make foreign direct investment more attractive. Because once investors swap their foreign currency assets for yuan assets, they may face losses from even greater appreciation of the currency when they do so years later. Therefore, the continuous and accelerating appreciation of RMB and the existing appreciation expectations will obviously affect the inflow of foreign direct investment in China. In addition, the foreign capital which has obtained considerable investment income will flow out of China under various excuses and channels. On the one hand, they have obtained the investment income and Shared the income brought by China's economic adjustment and growth; On the other hand, after two years of RMB appreciation, they also gained the benefits of appreciation. Thus, an accelerating appreciation of the renminbi is likely to prompt them to repatriate the proceeds as soon as possible.

In external payment, soft currency should be used more, and hard currency should be used more when receiving foreign exchange. In external financing, soft currencies should be sought to ease the debt burden. From the current international currency trend, the us dollar will continue to be weak, while the strong position of the euro will not change in the short term, and the RMB will continue to appreciate. Therefore, we should strive to use us dollar as the currency for payment and financing in foreign trade, and euro as the currency for income settlement, especially in RMB. Also, keep the foreign currency assets and liabilities in the same currency.

In developed countries, foreign trade enterprises use financial instruments of derivative financial market to store value is the most commonly used method to avoid exchange rate risk in international trade. Exchange rate hedging operations mainly include foreign exchange forwards, foreign exchange futures and foreign exchange options. These modern derivative financial instruments are widely used in the foreign trade risk control of western enterprises, while Chinese enterprises are quite unfamiliar with them. Foreign trade enterprises shall actively learn to master foreign exchange hedging instruments. In the case of gradual expansion of exchange rate fluctuations, cultivate foreign exchange professionals, constantly accumulate their own foreign exchange risk management ability, so as to take appropriate measures to protect their profits in case of exchange rate fluctuations.

When the settlement currency of China's export enterprises shows a trend of depreciation, the export price can be appropriately raised, or a certain proportion of exchange rate losses can be agreed with the importer; When the currency of settlement is likely to appreciate, China's import enterprises can ask foreign exporters to reduce the price of imported goods. Foreign trade enterprises can also advance or delay settlement time to avoid exchange rate risks. Enterprise can choose according to the currency exchange rate trend in advance or delay the settlement, if the predicted settlement currency relative to the currencies of China's imported enterprises can be delayed or deferred payment, and the export enterprises can export contract payment as early as possible, on the other hand, the import enterprises can import or payment in advance, export enterprises can postpone the delivery or allowing importers payment on deferred terms.

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