The Impact Of Exchange Rate Fluctuation On The Operation Of Multinational Enterprises And Risk Response Strategies

With the advancement of the reform of the RMB exchange rate formation mechanism,the exchange rate risk has become increasingly prominent,and it has also attracted widespread attention.Currency mismatch refers to the difference in value between assets and liabilities denominated in foreign currencies on the balance sheet of residents,enterprises,governments and the economy as a whole.Currency mismatches can cause a company's net profit and net worth to be more sensitive to exchange rate fluctuations.Multinational corporations generally have currency mismatches,and these foreign exchange risk exposures will affect the financial status and operating results of enterprises.Under the two-way fluctuation of the RMB exchange rate,the risk of currency mismatch faced by multinational corporations is more prominent and deserves the attention of enterprises.Under the mismatch of currency,this paper studies the impact of exchange rate fluctuations on the operation of multinational corporations,and analyzes the risk response strategies of enterprises.Firstly,based on the theoretical model of predecessors,this paper studies the impact of exchange rate changes on the net profit and net value of multinational corporations under the currency mismatch by constructing the profit model of multinational corporations and analyzing the impact of corporate net worth.Theoretical research has found that from the perspective of corporate net profit,for raw material import-oriented enterprises,the appreciation of the renminbi will bring benefits;the export-oriented enterprises will benefit from the depreciation of therenminbi.Therefore,different types of enterprises should conduct risk response strategies according to their own situations to prevent losses caused by RMB appreciation or depreciation.From the perspective of corporate net worth,in the case of holding net foreign currency assets,the appreciation of the local currency will reduce the net value of the enterprise;on the contrary,when the enterprise holds the net foreign currency liability,the local currency will appreciate and the net value of the enterprise will increase.The extent to which a company's net worth declines or rises depends on the extent of the exchange rate movement and the degree of currency mismatch.According to the above theoretical model,O-film Technology is used as an example to analyze the financial mismatch and foreign exchange risk exposure of O-film Technology by collating information such as corporate financial data and announcements,and discuss its foreign exchange risk response strategy.Finally,based on the above theoretical research and case analysis,this paper proposes corresponding suggestions for foreign exchange risk response strategies of multinational corporations in the case of currency mismatch and exchange rate fluctuations.