Compare And Plan For Foreign Trade Enterprises’ Proper Exchange Rate Risks Management

Since RMB exchange rate reform in 2005, China began to implement managed floating exchange rate system. Recent years, with the development of RMB exchange rate reforms and the addition and the inclusion of the RMB in the SDR basket of currencies, bilateral fluctuations in the RMB exchange rate continues to increase. This makes predicting exchange rates even harder. As a result, foreign trade enterprises’exchange rate risks rise and there is an increasing need for management.This paper taking XX Corporation from Xiaoshan, Hangzhou for example, researches for the proper management for enterprises’exchange rate risks. By analyzing XX Corporation’s product features, market features and capital flow characteristics, it indicates the necessity of management for exchange rate risks. Meanwhile, through comparing advantages, disadvantages and prerequisites of different managements, analyzing the costs of foreign exchange derivatives by researching for the rates of Bank of China respectively, this paper makes a plan of proper managements for XX Corporation. On that basis, this paper predicts exchange rate of RMB against the U.S. Dollar, Euro and Japanese Yen, then puts forward proper managements for XX Corporation’s business in the United States, European countries and Japan respectively. In the last chapter, this paper summarizes that joint efforts from both macro and micro levels should be made for foreign trade enterprises’exchange rate risk managements.