Exchange Rate Risk Management Of Commercial Banks In The RMB Exchange Rate Regime Reform Context

1970s, as the Bretton Woods system collapsed, more and more countries in the world adopt the floating exchange rate system. At the same time, as large-scale international capital flowed, foreign exchange market traded currencies frequently, the exchange rate volatility became more intense. Therefore exchange rate risk is particularly important for commercial banks.From July21,2005, the fixed exchange rate regime was broken. From then, market supply and demand with reference to a basket of currencies, a managed floating exchange rate regime was introduced; RMB exchange rate was no longer just pegged to the U.S. dollar, but the formation of a more flexible exchange rate regime. Since then, the People’s Bank of China introduced a series of successive regulations, and policies in order to promote the reform of RMB exchange rate system. June19,2010the reform was restarted, market-oriented exchange rate was strengthened. Compared to the foreign banks, however, the difference of exchange risk management of our commercial banks is obvious. Risk management techniques and experience are lacking, identification and measurement of exchange rate risk needs to be improved. Chinese commercial banks should take active measures to deal with exchange rate risk, learn advanced rate management method from foreign banks, establish and improve the exchange rate risk management system.This paper introduces the risk faced by commercial banks from the starting, the introduction of commercial bank exchange rate risk, and the classification, causes, measurement methods, management methods are reviewed. Then the development trend of RMB exchange rate after the reform is introduced and the influence of exchange rate risk to Chinese commercial banks, the progress of measurement and management method and challenges of commercial bank exchange rate risk management. At last relevant measures and suggestions to improve the exchange rate risk management of commercial banks is put forwarded. Specifically, this paper is divided into five parts:the first part:the background and significance of the research, the importance of exchange rate risk management of commercial banks, and some research results of domestic and foreign experts and scholars on the commercial bank exchange rate risk management. The second part:the commercial bank exchange rate risk is summarized in detail from the narrow and broad, the classification according to the formation mechanism, the method of measurement and management of exchange rate risk of commercial bank. The third part:reviews different periods of the RMB exchange rate system and the reform of the exchange rate reform process, analysis the impact on the exchange rate risk of commercial bank in china. The fourth part:the specific characteristics of the practice and the development process of the exchange rate risk management of our commercial bank, the existing problems and challenges. The last part of the paper puts forward some suggestions aiming at the existing problems of exchange rate risk management in our commercial banks.This practical significance of the paper is that with the deepening of the reform of RMB exchange rate system, the exchange rate floating ranges gradually increase and commercial banks are facing increased risk. Therefore, to improve the ability and level of the exchange rate risk management of commercial bank has become a pressing matter of the moment. After the reform of RMB exchange rate system, Chinese commercial banks are not only facing challenges, but having great-opportunities, commercial banks can adopt a series of method and means, effectively control the exchange rate risk caused by the fluctuations of market, increase profit amount, improve the competitiveness with foreign banks.