The Study On Foreign Exchange Risk Management In S Corporation

After the 2008 financial crisis,the RMB exchange rate fluctuates more frequently because of more flexible exchange rate formation mechanism and with the advance of the internationalization of RMB and other events.These changes in the external environment have brought great foreign exchange risks to multinational corporations(MNCs)in China.How to manage this risk effectively has become a major problem that can not be avoided in the management process of multinational corporations(MNCs).The dissertation analyzes the current situation of FX risk management of a scientific and technological corporation which was listed in Shenzhen Stock Exchange and is the “two outside” multinational corporation(hereinafter referred to as” S corporation”)and studies the problems of the corporation's FX risk management.Combined with the changes of the actual and external environment of the corporation,the control strategies of FX risk in the corporation are put forward: Firstly,the corporation can use commercial approaches as the first defense to manage of FX transaction risks in the corporation.Secondly,the corporation could make decisions of management strategies of FX risk ——asking risk to obtain the corresponding risk return,transferring the risk,or adopting flexible hedging strategies——according to the developing situation of the foreign exchange market.In view of the FX translation risk in the corporation,it is proposed to adopt the balance sheet rolling hedging strategies to prevent it.In accordance with the FX economic risk in the corporation,the diversified management and financing strategies are proposed according to the different risk preferences and the opportunities emerging in the foreign exchange,capital and product markets.In order to achieve the purpose of the above control strategies of FX risk,the dissertation constructs the system of FX risk control index of S corporation from the point of view of internal control.On the other hand,Early Warning of FX risk of S corporation is proposed and constructed in order to adapt to the external environment,especially the trend of foreign exchange changes.