The Case Analysis Of The Foreign Exchange Risk Management Of Powerchina Limited

Since 2005,the People's Bank of China has introduced a managed floating exchange rate system,so the RMB exchange rate has formed a more flexible exchange rate mechanism.On17 March 2014,the People's Bank of China raised the fluctuation of the exchange rate of the RMB against the US dollar from 1% to 2%.In the meantime,The global economy is showing signs of instability.From January 2014 to January 2015,the exchange rate between the ruble and the RMB fell sharply,and the euro exchange rate against the RMB and the exchange rate between the Swiss francs and the RMB were also being fluctuated.In recent years,the domestic construction market has become increasingly saturated,the domestic construction contractors have turned their targets to the overseas markets.At the same time,the strategy of "the Belt and Road" provides the construction industry with policy guidance to exploit the overseas market.Dozens of leading construction companies have made remarkable achievements in emerging market countries.However,opportunities and challenges coexist in this market.Foreign exchange risk is one of the inevitable but far-reaching risks.Faced with the complex foreign exchange market,the construction companies of “go global” have frequent capital inflows and outflows of their foreign currency.When the exchange rate fluctuates,companies will face greater foreign exchange risk.In order to protect the business results of the company,we must resolve the urgent question How to use scientific management methods to deal with foreign exchange risks and transfer existing risks.This article introduces the research background and significance of the research,as well as the research status of foreign exchange risk at home and abroad.This article also introduces the main contents and methods of this study.Explained the relevant theories and necessity of foreign exchange risk management of enterprises.This article analyzes the reasons why the industry is facing foreign exchange risk and statues of foreign exchange management.Based on practical problems,this article also analyzes the foreign exchange risk management methods and strategies of Power China limited.For providing some inspirationsof the foreign exchange risk management with construction companies and other companies that have a background of international business.