The Impact Of Foreign Currency Derivatives On The Foreign Exchange Rate Exposure

The implementation of “The Belt and Road” national development strategy,promoting the pace of China's multinational corporations' "going out";The gradual advancement of market-oriented reform of RMB exchange rate,the RMB against a basket of currencies presents a new pattern of rising and falling,RMB against the dollar in the SDR basket ends unilateral appreciation trend,begins to show the characteristics of two-way fluctuations,amplitude,frequency acceleration.In the new situation of the RMB exchange rate and the further integration of domestic and foreign markets,the foreign exchange risk exposure of China's multinational corporations is becoming more and more obvious.At present,some of China's multinational corporations selectively use some foreign currency derivatives in order to control the RMB exchange rate exposure,but the negative effects of foreign currency derivatives tansaction risk cases also caused widespread concern in the industry.In view of the current domestic theoretical research on the use of foreign currency derivatives whether can reduce multinational corporations' foreign exchange rate exposure in China is relatively few,therefore,study on the use of foreign currency derivatives whether can reduce foreign exchange rate exposure faced by multinational corporations in china can have important theoretical value and practical significance.This paper based on the theory of foreign exchange rate exposure and hedging,on the basis of analyzing the fluctuation characteristics of RMB exchange rate and the current situation of foreign currency derivative market in China,according to the foreign exchange rate exposure of multinational corporations in China,establish the multiple regression model,empirically analyze the influence of foreign currency derivatives on the foreign exchange rate exposure,finally,this paper puts forward some countermeasures and suggestions from the macro level and micro level.The main research contents and conclusions are as follows:(1)Based on elaborating the foreign exchange rate exposure and hedging theories,analyze the effect of foreign currency derivatives in the control of foreign exchange risk and the potential risk of foreign currency derivatives.(2)Through collecting and analyzing the data of RMB exchange rate,this paper concludes the RMB exchange rate fluctuations increase,the frequency is accelerated andthe two-way fluctuation trend is more obvious;at the same time,based on the analysis of the current situation of the development of China's foreign currency derivative market,pointed out that China's foreign currency derivative market is developing rapidly,but at the same time there are still some problems: market size is small,lack of exchange traded contracts,multinational corporations' proportion of using foreign exchange derivatives is low etc.(3)Based on the 2012-2014 960 of multinational corporations in China as the research sample,using Jorion two factors model to measure the foreign exchange rate exposure coefficient of the multinational corporations in China,and use the absolute value of the coefficient as dependent variables,then,by reading the annual reports of listed corporations to obtain multinational corporations' situation of the use of foreign curreny derivatives,as explanatory variables.Then,referring to the existing literature,select control variables,finally establish regression model,empirical analyze the impact of foreign currency derivatives on the foreign exchange rate exposure.(4)Through the above empirical research,this paper draws the following conclusions:the use of foreign currency derivatives can effectively reduce foreign exchange rate exposure of China's multinational corporations,mitigate the adverse impact of RMB exchange rate fluctuations on multinational corporations.(5)Based on the research conclusions,from the macro level and micro level,this paper puts forwards some suggestions on how to promote the development of China's foreign currency derivative market and promote the rational use of foreign currency derivatives.