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The RMB has appreciated by more than 8% against the U.S dollar in half a year, and foreign trade enterprises have taken many measures to avoid foreign exchange risks

From the low level at the end of May to now, the RMB exchange rate has recovered all the way and recently reached around 6.5, entering the “6.5 eras”.The central parity rate of the yuan eased 27 basis points to 6.5782 against the U.S. dollar on Nov. 30, data from the China Foreign Exchange Trade System showed. Based on the May 27 low of 7.1775, the yuan has appreciated 8.3% so far.

For the recent strong performance of the RMB, the Bank of China Research Institute researchers believe that the main reasons are two: first, the signing of the RCEP brought good news, the Asia-Pacific regional integration is further promoted, which helps to promote the growth of China’s export trade and economic recovery; On the other hand, the continued weakness of the US dollar, falling again to around 92.2. Last week, the depreciation reached 0.8%, which pushed the passive appreciation of the RMB exchange rate.

However, for foreign trade enterprises, the appreciation of the RMB is someone happy someone worry. When the domestic currency appreciates, the price advantage of export commodities will be reduced, and imported commodities will be cheaper. Therefore, it is beneficial to import enterprises, but the impact on import processing and re-export enterprises is limited, while the impact on export enterprises is greater. For foreign trade enterprises, in addition to financial personnel need to make a forward-looking judgment on the trend of the exchange rate, it is also very important to choose hedging tools for exchange rate risks such as options and forwards.

Post time:Jan-09-2021
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