Financials Nov 26, 2020 06:36 AM (GMT+8) · EqualOcean
Since the end of May, the RMB exchange rate has entered a rapid appreciation channel, rising about 6000 basis points in half a year. Wang Chunying, deputy director of the State Administration of foreign exchange, previously said that enterprises should actively prevent exchange rate risk and establish a risk neutral concept. First, we should change the unilateral linear thinking that RMB exchange rate is either up or down, and establish the awareness of two-way fluctuation of RMB exchange rate. Second, it is necessary to trade reasonably and prudently and hedge the exchange rate exposure appropriately. Third, we should try our best to control currency mismatch and arrange the currency structure of assets and liabilities reasonably. Fourth, we should not use exchange rate hedging tools as speculative arbitrage tools and take unnecessary risks.

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