Research On Clothing Export Company's Foreign Exchange Risk

With the continuously deepening of China's exchange rate reform and marketization,the bilateral exchange rate fluctuation has become a normal state.For a long time,China's garment export enterprises have earned a place in the international market with their price advantage.However,with a more complicated environment,China's small and medium-sized foreign trade enterprises have been more sensitive to exchange rate fluctuation.Being insufficient in hedging risks,they can easily lose their price advantage in exchange rate fluctuation.Turning to the use of derivatives is becoming the key factor in the operation of these enterprises as the exchange rate fluctuation becoming more frequent.By the methods of literature research,investigation,theoretical research and case study,this paper discusses the practical significance and strategies for foreign trade enterprises dealing with exchange rate fluctuation.Firstly,it systematically introduces relevant domestic and overseas literatures,and summarizes the latest research achievements in this field.Secondly,it theoretically illustrates the necessity of hedging foreign exchange risk,the classification of foreign exchange risk and its impaction on enterprises.At last,it explains the exchange risk management theory and introduces the exchange derivative products and market.Taking the garment export enterprise MM Company as a case,the thesis discusses the problem faced by foreign trade enterprises after China's exchange rate reform,and illustrates the methods for these enterprises to hedge exchange rate risks by using exchange derivatives.The thesis also studies different types of foreign exchange risks faced by domestic garment export enterprises and methods to hedge such risks by using derivatives.It illustrates corresponding theories and financial instruments for these enterprises as a reference.