Research On Corporate Finance In Currency Fluctuations

With the rapid development of China’s macro-economic and continuous improvementof the international competitiveness, China’s capital market has quite a large scale. Theimpact of capital markets on China’s economy is growing, so is corporate financing. Onthe one hand, due to the increasing tax differential and foreign exchange reserves ofChina’s foreign trade, the RMB is facing growing pressure to appreciate. The overheatingdomestic economy, on the other hand, and the base money supply growth which lead toexcess liquidity further aggravate inflation. Chinese enterprises in financing not only haveto face with the RMB exchange rate risk, but also face up to difficulties in financing whichthe central bank implements the tight monetary policy. Enterprises urgently need tooptimize the financing structure, expand financing channels, reduce financing costs andrisks, and improve financing efficiency, according to their scale, industry nature, and stageof developmentFirstly the paper present and summarize domestic and overseas theories andachievement about currency fluctuation and corporate finance. Then the paper defines theconcepts, in order to clarify the scope of this study. RMB currency fluctuation has twoforms: the external appreciation and the internal devaluation, the paper explore andanalysis the two forms’ trend,causes and the impact to corporate finance, which is the oneof the paper’s entry point and innovation point. Subsequently, the paper analyzes theinternal and external environment of Chinese corporate finance, so as the principle of theselection. After summary the development of Chinese corporate finance, this paperexplores two representative cases, which could show how to improve financing efficiencyand set around financing risk facing with external appreciation and inter devaluation.Finally, in allusion to the exploring of a range of issues, as well as analysis of the case,this paper put forward corresponding measures, hope that it can provide reference insetting around corporate finance risk, expand financing channels and improve financingefficiency.