RMB Exchange Rate Fluctuation And Fureign Currency Debt Financing Of Real Estate Nterprises

On July 21,2005,PBOC announced the implementation of the RMB exchange rate regime based on market supply and demand,with reference to a basket of currencies for adjustment managed floating exchange rate system,from then on the RMB exchange rate began the market-oriented process.During the ten years from"721" to "811",the overall trend of RMB was generally appreciating.The appreciation of the RMB helps enterprises financing in the international market to reduce financing costs and obtain additional exchange earnings,so the scale of foreign currency debts of Chinese enterprises has increased sharply in recent years.However,with the exchange rate regime of "811",coupled with the transformation of China's economic structure and the continuous interest rate hikes of the FED,the situation of the RMB is expected to depreciate against the dollar.As a result,enterprises that have used a large amount of foreign currency debt are exposed to huge foreign exchange risk exposure,and exchange rate fluctuations have become an important factor for enterprises to consider the cost and benefit of borrowing and financing in the international market.As a capital-intensive industry,the real estate industry needs to borrow a large amount of capital for its development.The appreciation of RMB and the rapid economic development make the real estate enterprises enter the "golden decade" of development,and they borrow a large amount of foreign currency debt while borrowing a large number of loans and financing from domestic Banks.The use of foreign currency debt not only solves the problem of capital sources for real estate enterprises and enriches diversified financing channels,but also brings additional exchange gains to real estate enterprises due to the rapid appreciation of RMB.However.But the depreciation of RMB exchange rate in the recent two years has also brought huge exchange losses and foreign exchange exposure to real estate enterprises with a large amount of foreign currency debt balance.Based on the importance of exchange rate fluctuations for enterprises' foreign currency debt financing decisions,real estate enterprises have a large scale of financing and a high proportion of foreign currency borrowing.This paper takes real estate enterprises as an example,selects 94 listed real estate enterprises,and manually sorts out the data such as the ratio of foreign currency debt to debt financing sources,to explore the impact of exchange rate fluctuations on foreign currency debt financing decisions of real estate enterprises.This paper uses the Data of exchange rate changes over a period of 10 years from 2008 to 2017,as well as the latest foreign currency debt financing Data of real estate enterprises,establishes the Panel Probit?Logit and Panel Data regression model,and conducts an empirical analysis on the correlation between RMB exchange rate changes and foreign currency debt financing decisions of real estate.The empirical results show that exchange rate fluctuations have a significant impact on the confidence level of 1%.In other words,when RMB appreciates,more real estate enterprises conduct foreign currency debt financing(FCDD1),and the proportion of foreign currency debt financing of enterprises with foreign currency debt financing increases significantly(FCDD2).In the aspect of theoretical value,this paper studies the financing path,changing trend and relevant policies and regulations of foreign currency debt borrowed by real estate enterprises in China.At the same time,the exchange rate is taken as the research object to be included into the factors influencing the foreign currency debt financing decision of enterprises,which enriches the factors influencing the financing decision of enterprises.In terms of applied value,the significance between variable indexes is revealed through the regression of factors such as exchange rate fluctuation and foreign currency debt data of real estate enterprises.By analyzing the factors affecting the foreign currency debt financing decisions of real estate enterprises,this paper gives the measures taken by the country and real estate enterprises themselves to better cope with the exchange rate risks of enterprises in the increasingly frequent fluctuation of RMB exchange rate,and provides their own ideas for the better and better development of real estate enterprises in China.