DYC Company Exchange Rate Risk And Control Research

Electrical industry is not only an important part of China’s foreign trade, foreign trade and is a indispensable driving force. Advantage of low-voltage electrical outlet is still built on low labor costs and low prices, and in 2005 the exchange rate reform to make the continuous appreciation of the renminbi, is bound engulfs its cost advantage. If you stick to the original method of controlling the exchange rate risk, foreign exchange market is bound to meet the current environment. Therefore, how to improve the ability to identify the exchange rate risk, exchange rate risk put forward practical control methods, and improving the ability to handle the exchange rate risk is an urgent problem faced by low-voltage electrical industry. Writing Based on the background of the future appreciation of the renminbi, select low-voltage electrical industry, a member of the DYC companies. The idea of writing this article the following conduct:First proposed the concept of exchange rate risk, analyzes the main export enterprises exchange rate risk, foreign exchange risk in the proposed general approach.Secondly, in order to better study the characteristics of low-voltage electrical exchange rate risk, select the DYC’s case, analysis of the internal and external situation DYC and use of company executives looking DYC questionnaire in exchange rate management control methods exist problems are mainly using only simple tools to control the exchange rate risk, less so advanced control tools and exchange rate risks in the specific business operations, over-reliance on a single tool, less combination.Again according to the company exists DYC control method in exchange rate management problem, a program to control the exchange rate risk, on the one hand the use of natural hedging program risk control law proposed an operation flow chart is divided into two parts: one part and imported providers negotiate the transfer of foreign exchange risk, the use of the terms entered into currency hedging, risk sharing provisions signed shorten settlement time; another part of the initiative, the use of forward foreign exchange, swaps, use of trade financing.Finally, a case to illustrate the use of natural law to control risk hedging program and the use of financial derivative products to control the exchange rate risk the validity of the evaluation.