Research On Exchange-Rate Risk Warning And Countemeasures For Chinese Listed Multinational Corporations Based On BP Neural Network

Since 21st July 2005,China started to implement a new exchange rate policy-floating exchange rate which is on the basis of market supply and demand and regards a package of currencies as reference to adjust and manage exchange rate. More flexible RMB exchange rate formation mechanism, market leading the RMB exchange rate and frequent fluctuation of exchange rate, the wider listed multinational corporations are faced a huge exchange-rate risk. In the past few years,with increasing appreciation of the RMB, it has brought tremendous pressures and challenges to multinational corporations. Exchange rate fluctuation has very important influence on the competitiveness of enterprises, financial stability, risk management and others.Exchange-rate risk is a problem which Chinese listed multinational corporations always confront, along with further deepening of China's opening up, the globalization of corporations has become much more highly, the risk which brought by the exchange-rate fluctuation has been enlarged from July 21,2005 the exchange rate reform.Thus, how to predict the exchange-rate risk accurately becomes a crucial problem for corporations. The paper uses the BP neural network to establish a model of exchange-rate risk early warning for Chinese listed multinational corporations, by taking panel data consisted of firm size, export-ratio and total risk of T-1 and T-2 as the sample to predict the exchange gains and losses of T. After repeated training and studying of the samples, we got a distinguishing-positive rates of 88.24% to the sample of T-1 and 64.71% to the sample of T-2. The research indicates that the predicting precisions of the model is relatively optimum so it's an ideal method for forecasting, with high value of popularizing. Finally, the paper offers some counter-measures to Chinese multinational corporations under the exchange-rate marketization of RMB.