Research On Optimization Of Exchange Rate Risk Management System Of K Company

With the changes of the times,in order to better adapt to China’s own development and foreign trade needs,the exchange rate between the RMB and other currencies and the formulation and reform of relevant policies have been constantly deepened and improved.Today,the bilateral fluctuation of the RMB has become normal,and the rise and fall of the RMB in the short term is also a normal phenomenon,and the trend of the exchange rate shows a wide range of shocks.In the past ten years,China’s RMB exchange rate has been dominated by the unilateral appreciation of the RMB against the U.S.dollar,which has made most of the managers of China’s foreign trade enterprises generally lack the awareness of exchange rate risk management,nor the ability and practical experience of risk management.Even some foreign trade enterprises cannot adapt to the reform needs of China’s RMB exchange rate marketization after the "8.11" exchange rate reformation,which has resulted in a large number of exchange losses.Through in-depth research on the exchange rate risk management system of foreign trade enterprises,it can help enterprises realize the importance of exchange rate risk management,how to do better in exchange rate risk management,and further enhance the early warning awareness and resilience of risks,so as to help enterprises get better and more sustainable healthy development.This paper will take the domestic import and export company K as a case to conduct in-depth research on the exchange rate risk management system of enterprises.Enterprise K has an annual import and export volume of 400 million US dollars,and the income of overseas trading companies accounts fora quarter of the total operating income of the enterprise.Observing the data of enterprises,the author finds that the financial expenses of K enterprise have been relatively high in the past five years,and the exchange loss accounts for the highest proportion,which is very unfavorable for the enterprise’s import and export business and the improvement of its competitiveness in overseas markets.For enterprise K,it is very important to strengthen the optimization of the "exchange gain/loss" account in the account for the overall income of the enterprise.The most basic way to do a good job in this account management is to strengthen the enterprise’s exchange rate risk management.Based on a large number of domestic and foreign literature,the author combed and summarized the concepts of enterprise risk management theory and exchange rate risk management theory,which laid a solid theoretical foundation for subsequent research.In addition,the author also summarizes threedifferent exchange rate risks that K Company is facing in the actual operation,namely,economic risk,transaction risk and conversion risk,as well as risk management business process,and expounds the main problems of K Company’s exchange risk management at present.In the current situation of exchange raterisk management of enterprises,the evaluation of exchange rate risk management results of enterprises shows that even though enterprise K hasadopted cross-border RMB settlement,foreign exchange derivatives,asset portfolio adjustment and other corresponding risk management measures,exchange gains and losses still account for a large proportion of costs and expenses,the exchange rate risk of enterprises is still large,and the efficiency ofexchange risk management has not been significantly improved.The research shows that the main problems faced by K enterprise in exchange rate risk management are: First,it has a speculative attitude towards the exchange rate market and has not defined the annual exchange rate management goal according to the actual cost profit demand;Second,the responsibilities of employees are confused,and there is no special risk management department within the enterprise,Third,there is noscientific exchange rate risk early warningsystem,and it is obvious that the ability to deal with various risk events in thenew era of two-way exchange rate fluctuations is not available only by a single exchange rate management method.In the face of the above specific problems,this paper puts forward suggestions on improving the exchange rate risk management system from the aspects of enhancing enterprise risk management awareness,,improving the company’s risk management organization system construction,improving the enterprise risk management process,and improving the enterprise risk early warning and evaluation system,so as to help enterprise K form a full process system with risk identification,risk assessment,risk early warning and risk response.A comprehensive enterprise exchange rate risk management system,from the optimization of the structure of various departments within the enterprise to the training of specialized managers,to promote the healthy and sustainable development of the company.According to the new normal of two-way floating of RMB exchange rate and the actual operation and management status of the company,the research on exchange rate risk management is expanded from unilateral appreciation of RMB exchange rate to bilateral floating,and the research on exchange rate risk management is supplemented;At the same time,it also puts forward new ideas and plans for K enterprise to better improve the exchange rate risk management system and improve the management level,which also has considerable reference value for other similar foreign trade enterprises.