Research On Exchange Rate Risk Management Of Yangzhou FT Trade Co., Ltd

With the deepening of reform and opening, the scale of China’s foreign trade is continuously expanding, many enterprises are gradually moving towards the international market, in order to participate in international competition. In the short term exchange rate fluctuations in relation to direct interest of all foreign companies, the enterprises in the import and export trade, overseas investment and financing in the process of operation cost and operating results; but in the long term, exchange rate volatility could lead to significant changes in the enterprise faces the competition situation, the ultimate impact of its long-term profitability.The whole world is watching China’s economic rise, and a large number of small and medium enterprises is promoting an inexhaustible motive force for the rapid development of Chinese economy. Small and medium-sized foreign trade enterprises generally are of small scale, weak ability to resist risks. At the same time, foreign exchange business involves international practice, a lot of trade rules and international law and other factors, with strong technicality. In this case a lot of small and medium-sized enterprises to cope with exchange rate risk consciousness, related management methods to circumvent the risk is impossible. Small and medium enterprises will gradually enter the international market. In order to have the long-term stable development, small and medium enterprises must face the challenges, positive coping, active use of economic management and financial tools to avoid exchange rate risks, to find out the exchange rate management strategies to adapt to their own development.This paper is mainly to Yangzhou Fangtong Trading Co. Ltd. as the main object of study, from the operation and management of Yangzhou Fangtong Trading Co. Ltd. practice, with reference to domestic and foreign theories of exchange risk management, through the analysis of the current management environment and management in Yangzhou Fangtong trade limited company, focus on the analysis of the company’s business risk and economic risk, Yangzhou Fangtong Trading Co. Ltd. of management of exchange rate risk exists in the current exchange rate system problems are:the lack of scientific concept of risk management, the lack of hedging instruments, comprehensive and effective, the lack of foreign exchange risk management professionals. To solve these problems, we proposed in the current exchange rate regime in Yangzhou Fangtong Trading Co. Ltd. of exchange rate risk management measures:firstly to make clear that risk-averse and hedge are the objective of exchange risk management; secondly to improve the ability of recognition of exchange rate risk; thirdly to strengthen the exchange rate risk management training, to set up the consciousness of risk management, to cultivating the staff’s exchange rate management skills and abilities; finally integrated using exchange rate risk management strategy. In the aspect of financial management, flexibly use financing to reduce operating costs and to improve the economic benefit.In the aspect of financial derivative tool, actively use financial derivatives to control and reduce the risk of exchange rate. In the aspect of business trade, rationally use the terms of the contract to combine the exchange rate risk management to long-term development strategy. Adjust the production strategy, control cost, improve product technology content, to cultivate the core competitiveness of products, improve the ability of enterprise bargaining.Further, studying of exchange rate risk management of Yangzhou Fangtong Trading Co. Ltd. to provide reference for the prevention and management of exchange rate risk in small and medium-sized foreign trade enterprises of our country of the same type, to help small and medium-sized foreign trade enterprises more stable and healthy development, and promote the healthy development of China’s international trade.