Research On Risk-oriented Managements Of Foreign Exchange

In recent years, with the development of economy, the international transactions of Chinese multinational enterprises are more and more frequent, and the foreign exchange reserves are more and more abundant. But the enterprises’s managements of foreign exchange risk are weak and without an effective system. How to strengthen the concept of risk, how to reform and perfect the foreign exchange control system, how to strengthen the understanding of the exchange rate risk problem and how to avoid the internal-control risk and the exchange rate risk are all significant. It’s necessary to make a practical and valuable theory to conduct the risk-avoiding management of foreign exchange funds.By the influence of the change in exchange rate, foreign exchange risk is popular in the enterprises’s international business. It’s difficult to avoid risks. The changes in the exchange will not only affect on the product price, prices of raw materials and labour price, but also directly affect on the financing cost and capital. All the influence in international trade and capitals are resulted in the value of the company. Foreign exchange risk, as one of the important aspects to the enterprises, will give enterprises great challenges on managements of foreign exchange funds risk.Since RMB reforms, Chinese export-oriented enterprises do a lot of work to avoid and guard against the risk of exchange rate. The main method concentrated in the following respects. The first method is doing trade financing. It’s an import and export trade business, such as delay payment, which is making full use of the RMB appreciation to enjoy the benefits of rate. Second is the dollar loan, using the dollar debt to increase exchange gain. Third is the use of financial products. There are many other specific measures, such as changing trade settlement way, increasing the price of export products, converting the dollars money, increasing the proportion of sale in domestic market, etc.But most of Chinese enterprises are lack of management consciousness of exchange rate risk. The enterprises’s internal-risky management practices are limited to the department of internal-independent-risky control, the managements of foreign exchange funds risk are random and unsystematic. In addition, the control systems in enterprises are lack of scientific theory and method, the management mode of foreign exchange risk are passive, the activities of risk managements are instantaneous and inconsistent, the risk management talents are deficiency. These problems need enterprises to carry out efficient managements of foreign exchange risk to resolve them.Risk managements in Chinese foreign-related enterprises are still in the initial stage. This paper is based on those issues on the full text points and divided into four parts. Each part of the main contents are as follows:The first part of the paper mainly introduces the research purpose, the research background, the research method and the thinking framework.The second part introduces the concept and characteristics of foreign exchange risk, the risk influence on the enterprise and the concept of management foreign exchange risk.The third part discusses the identification method of avoiding risk and the connotation of risk-oriented foreign exchange management, including the meaning, contents and theoretical basis; introduces the implementation procedures of foreign exchange risk management. According to the foreign exchange risk management, the paper analyses the actual case of CQ company to enumerate the foreign exchange risks in this company, and how to control the CQ company’s total risks, how to implement the standard process in company, how to establish and improve the management of foreign exchange control to reduce company’s foreign exchange risk to an acceptable level.The last part summarizes this paper. Through the above theory of paper and the actual cases, the paper makes sure that enterprises should establish and improve the system of foreign exchange risk management, effectively control the system, and reduce the foreign exchange risk.