Foreign Exchange Risk Management For Small And Medium-sized Home Appliance Export Enterprises

With the continuous reform of China’s foreign exchange financial system,the degree of RMB marketization has significantly improved,showing the characteristics of two-way floating.There are many factors that cause exchange rate changes,including not only domestic industrial policies and domestic economic environment,but also international relations and international financial market fluctuations.Therefore,most small and medium-sized export enterprises believe that they have no ability and energy to manage foreign exchange risk and ignore foreign exchange risk.Foreign exchange risk management is very important for enterprises.It is not only related to the operating efficiency of enterprises,but also the key factor to determine the survival of enterprises that rely on import and export business.Its importance is increasingly prominent in enterprise strategic management.The effectiveness of foreign exchange risk management for foreign-related enterprises is the key to determining whether they can continue to operate steadily.This paper comprehensively uses the literature research method,theoretical research method and case study method to explore the practical significance of foreign exchange risk management of small and medium-sized household export enterprises,and puts forward its own suggestions for HL household’s foreign exchange risk management.Firstly,it systematically reviews relevant domestic and foreign literature,summarizes the definition of foreign exchange risk,influencing factors,and solutions.Then it introduces the classification of foreign exchange risk,the procedures of risk management,and the objectives and methods of foreign exchange risk management in theory.Then combined with the current situation of HL Home,put forward targeted management measures.This paper focuses on the foreign exchange management practice of HL Home,a furniture export enterprise,taking the sharp increase in exchange gains and losses of HL Home from 2020-2021 as the starting point,systematically analyzes the reasons for the sharp increase in exchange gains and losses,and discusses the measures to avoid foreign exchange risks,so as to improve the enterprise’s foreign exchange risk management system.Then it summarizes how household export enterprises of similar scale manage foreign exchange risk,use operational and financial hedging methods to reduce foreign exchange risk technically,establish foreign exchange risk management system,connect internal management channels,and reduce the possibility of large exchange losses.