Cimc Exchange Rate Risk Management Model Study

Under the influence of the global economic changing, the rate of foreign exchange waves violently. Up or down? There are so many quarrels about the rate of exchange between RMB and Dollar. Although RMB hold on the fixed exchange rate with Dollar, the rate has a strong tendency to wave. One hand, Dollar is the free currency and carries on the floating exchange rate. The rate between RMB and other currencies is floated. On the other hand, RMB becomes stronger than before as the increase of the China economic. The exchange rate of RMB will be more marketing and the related policy could change. So the exchange rate of RMB would wave more greatly. This takes the uncertain exchange risk to each international enterprise. It is essential that the enterprise establish an effective risk management system of the exchange rate.CMC is an international enterprise which sells its products all over the world and has established some subsidiaries companies in other countries. It accelerates its pace to be an international company in recent years. The waves of the exchange rate make CMC face the great risk. But, there are obvious disadvantages of the exchange risk management in the company. This makes obstacles to the development of enterprise. It is eager to improve the exchange risk management system. Base on the studies, this article sets up a complete risk management system of the exchange rate to avoid the loss caused by waves of rate. This can make the enterprise operate well and guarantee the company to have a good future.This article consists of five parts. Part one introduces the significances of the study and the method to study. Part two analyzes the distance of the rate risk management between CMC and other advanced enterprises. Part three analyzes the exchange rate risk of company and gives the solution model. Part four introduces how to carry out the risk management of the exchange rate. Part five is the conclusion of this article.