Analysis Of RMB Exchange Rate Trend And Application Of Foreign Exchange Derivatives

With the internationalization of the renminbi,the renminbi exchange rate formation mechanism continues to move towards a "clean exchange rate",breaking the expectation of one-way appreciation and devaluation,and the volatility has increased,especially since the "811" exchange rate reform in 2015,the two-way volatility of the renminbi exchange rate has continued Increased business risks and challenges for domestic foreign-related enterprises have increased.In the context of global economic integration,the U.S.dollar is still the main settlement currency.However,it seems difficult to grasp the law of changes due to the different exchange rates of various countries' economic levels and policy conditions.Frequently fluctuating exchange rates will become a continuous concern in business operations.Important part."Exchange rate risk" is neutral on the agenda.For domestic companies,it is essential for domestic companies to manage exchange rate risks,use foreign exchange derivatives,lock in financial costs,and smooth cash flow.This article will analyze the macroeconomic factors,such as economic fundamentals,balance of payments surplus and deficit,foreign exchange reserves,etc.,by combing the formation mechanism and influencing factors of the RMB exchange rate,and put forward the direct influence factors of exchange rate and market transaction factors:The forward foreign exchange settlement and sales data,the RMB index,the US dollar index,etc.,which determine the transaction volume in the foreign exchange market,are due to the two-way wide fluctuations in the RMB exchange rate that will be one of the important risks that will affect business operations in the long term.The method of long-term hedging,especially the use of financial hedging instruments-foreign exchange derivatives,summarizes the effects and specific strategies of companies using foreign exchange derivatives.For example,forwards should pay attention to changes in swap points and option derivatives.Implied volatility,etc.,and derivatives tools used by companies with different import and export directions.In order to further explore the effect of the use of foreign exchange derivatives,the author selected a large private J company in Shandong as a case study and analysis.The use of foreign exchange derivatives tools by this company started from zero,and even the exchange rate risk management has been unavailable in the past four years.,Gradually improved,since 2016,the company has created a large foreign exchange risk exposure due to imported crude oil.It initially explored the effect of using foreign exchange derivatives to avoid exchange rate risks,and then accumulated a certain amount of experience in the use of foreign exchange derivatives.Using the adjustment and improvement of strategies,I analyzed the good results achieved by the same use of foreign exchange derivatives under different hedging ratios and certain predictions of changes in the RMB exchange rate.Further suggestions,such as establishing a risk-neutral awareness,grasping the entry time of derivatives transactions,and adjusting the hedging ratio.Since exchange rate risk management is a systematic work of enterprise risk management,the author proposes how companies should scientifically establish a foreign exchange risk management structure and exchange rate management process.Evaluation links and scientific design evaluation models should be added to the management process.At the same time,it is recommended that J company give full play to The role of overseas subsidiaries makes good use of the ideas of the overseas RMB and foreign exchange market.The current "China-US trade war" and the global economic situation after the "new crown epidemic" that swept the world in 2020 are uncertain about the changes in the RMB exchange rate trend.Through the analysis of actual cases of J companies,the exchange rate risk management of such foreign-related companies establishes the principle of "risk neutrality".It should have a certain ability to predict the trend of the RMB exchange rate.Together with the use of supporting foreign exchange derivatives,can it effectively avoid the risk of corporate exchange rate fluctuations.