A Research Of The Foreign Exchange Rate Risk Management For Export Business

Within the gradual advance of the reform of the RMB exchange rate being market driven,the double-way fluctuation of the exchange rate will become a new normal state of RMB exchange rate in the future.In this context,domestic enterprises whose products are mainly for exporting will have to face the risk of exchange rate fluctuations.In order to reduce the foreign exchange risk and remain a stable business,these enterprises must manage the foreign exchange risk.Based on the influence of foreign exchange risk on export enterprises and the methods,principles and procedures of export enterprises' management of foreign exchange risk,this paper initially establishes an implementation framework for foreign exchange risk management of export enterprises based on existing research and practice.On this basis,combining the internal and external environmental factors of small and medium sized export enterprises,this paper discusses the special difficulties and countermeasures of small and medium-sized export enterprises in foreign exchange risk management,and initially established a framework of small and medium-sized export enterprises in foreign exchange risk management.Through case studies,this paper also discusses how can AC Corporation adjust its current foreign exchange risk management mode based on its business and outside circumstance and puts forward some suggestionsThrough theoretical analysis and case study,the following conclusions are drawn due to the imperfect internal management and many unfavorable factors in the external environment,small and medium-sized export enterprises face a series of special problems when they are carrying out foreign exchange risk management.In order to improve the foreign exchange risk management,small and medium-sized export enterprises should follow the cost-benefit principle and a systematical process to implement the management of foreign exchange risk.At the same time,firms must pay attention to the potential risks from the risk management process and eliminate these risk to avoid triggering crisis of the enterprise.This paper also suggests that for many small and medium-sized enterprises,taking a negative strategy in the normal condition while establish the response mechanism for specific events and taking positive risk management strategies when these events occur is one of the foreign exchange risk management strategy can be taking.The framework for foreign exchange risk management proposed in this paper has a certain reference significance for the risk management of export enterprises.Besides,the ideas that risk management of small and medium-sized export enterprises should be based on the cost-benefit principle and that specific event response mechanism should be taken into practice can be taken into practice in foreign exchange risk management by SMEs.