Research On Development Of Our Currency Derivatives

With the rapid development of international economic integration and the end of the transition period of our accession to WTO, Chinese domestic enterprises'business environment is increasingly open. At the same time, the exchange rate formation mechanism of RMB becomes more and more flexible because of the reforms of our exchange rate system. All of these make our market closer with the world market. So our enterprises face an ever greater currency risks. But due to the past relatively stable exchange rate of RMB to dollar, the majority of our enterprises do not have a strong awareness of the currency risks or hedge ability, and as the tool for hedging, our country's currency derivatives is not only single but also lagging behind. To hedge better, we must study on how to develop Chinese currency derivatives. In this background, referring the successful experience of other countries, considering our country's condition and then researching how to develop our currency derivatives has both theoretical and practical value.The development of financial derivatives tells us that the propulsion and the main reason of it is the demand for risk management. But the study of development research of currency derivatives from the perspective of currency risk management is rare. So this paper studies on how to develop our country's currency derivatives from the perspective of the enterprises'demand for currency risk management.Firstly, this paper reviews the general theory and development of currency derivatives, then reviews the development of currency derivatives in the world and in our country, and analyzes the reason for our failure before. Secondly, this paper tries to prove that it is necessary to develop currency derivatives in our country, and the basic qualifications for currency derivatives development have been provided. Thirdly, this paper proposes the developing path of currency derivatives from three aspects of system, market and derivatives from the perspective of the enterprises'demand for currency risk management, and then discusses the application of currency derivatives in corporate currency risk management both in theory and in practice. Then it analysis the transaction risks which enterprises may face when they use currency derivatives to hedge, and the cause of formation of the transaction risks. Finally, this paper lists its basic conclusions and the countermeasures to the transaction risks, and then points out the direction I should strive to study in the future.