Research On Exchange Rate Risk's Prevention And Control Of Hunan Foreign Contracted Project Under The Background Of The Belt And Road Initiative

The year 2018 is the fifth anniversary of the proposal of "The Belt And Road".At present,the foreign contracted project is one of the areas with the best progress in the construction of "The Belt And Road",while the economic opening of hunan province needs to be strengthened.It is of great significance for hunan province to promote the development of foreign contracted project.Due to the complex and unpredictable international economic situation,foreign contracted project enterprises may suffer losses caused by exchange rate fluctuations,so it is particularly important to effectively prevent and control the exchange rate risks of foreign contracted projects.Based on the research results of scholars at home and abroad,this paper sorts out and summarizes the exchange rate risks of foreign contracted projects,and introduces the measurement and prevention methods of exchange rate risk of foreign contracted projects.Then,combining with the status quo of the foreign contracted projects in Hunan Province,this paper investigates the exchange rate risks and problems in the prevention and control of exchange rate risks faced by hunan province's foreign contracting projects,It is found that the enterprises in hunan province have such prominent problems as difficulty in risk prevention and control,inadequate risk prevention and control planning,aggressive operation of private enterprises and difficulty in risk control.By selecting the most representative currencies of hunan province's foreign project contracting projects,namely US dollar,Euro,Japanese yen and Australian dollar,this paper uses VaR-GARCH method to measure and empirically analyze the exchange rate risk faced by Hunan's foreign project contracting.Through various tests on the selected samples,the empirical results prove that var-garch method can be used as a tool to measure the exchange rate risk of hunan province's foreign contracting projects,and provide an alternative method for enterprises to quantify the exchange rate risk they may face.At the same time,by calculating the VaR value of the sample sequence,the results show that under each confidence level,the exchange rate risk of the main exchange currencies of Hunan's foreign contracted projects is significant,and each currency shows certain characteristics.Among them,the VaR value of the Japanese yen is the smallest,followed by the Australian dollar,while the average VaR value of the US dollar,as the main exchange currency of Hunan's foreign contractedprojects,is slightly larger than that of the Australian dollar and Japanese yen,but less than the Euro.Combining with the actual situation of Hunan Province,this paper compares and analyses the risk prevention and control strategies of foreign contracted project enterprises,such as using contract terms,financial instruments and adjusting the project schedule.Enterprises can formulate strategies to prevent and control exchange rate risk according to their own characteristics and combining with the actual situation of the project.In order to better support the development of Hunan's foreign contracting projects and improve the ability of enterprises to prevent and control exchange rate risks,a good external environment should also be created.From the perspective of enterprises,financial institutions and governments,this paper further proposes that enterprises should enhance the awareness of prevention and control of exchange rate risks and establish innovative platforms and business models.Financial institutions should strengthen export credit insurance support and improve relevant foreign exchange management policies;And the government should increase policy support and improve the coordination and communication platform and other relevant safeguard measures to provide support for Hunan foreign contracted projects to prevent and control exchange rate risks.