In recent days, affected by the situation in Russia and Ukraine, the exchange rate, raw materials and other key factors related to foreign trade costs have fluctuated sharply. How should we foreign traders deal with them to avoid risks? Screw Terminal Block, Female Connector and Motorcycle Reflector should be noted.
RMB impact 6.3 mark!
In the first trading day of this year, the central parity rate was set at 6.3794 against the US dollar. On March 1, the central parity rate was set at 6.3014 yuan, the highest in more than three and a half years, up more than 700 basis points from the beginning of the year.
In the first two months of 2022, as of 18:00 on February 28, the onshore RMB was at 6.3074, up 1.03% for the year; the offshore RMB hit an intraday high of 6.3089, the lowest was 6.3275, up 0.86% in the year.
Come back a year, profit evaporate a point.
This trend makes many foreign trade people want to cry tears.
We can't help but ask:
The dollar index has all risen to 96 (the highest since July 2020), so why hasn't the yuan gone either way?
The international situation has plunged currencies from the euro to the won, so why does the yuan remain at a four-year high?
This is because, first of all, in the second half of last year, especially in the fourth quarter, the RMB showed a rare divergence between the US dollar and the DOLLAR index, with the US dollar index stronger, the RMB is stronger than the US dollar.
Secondly, in the current situation, the traditional safe haven currencies such as the euro safe haven function weakened, and the market began to look for new safe haven assets.Thanks to China's stable social development environment, prudent fiscal and monetary policy and high return on assets, RMB assets are increasingly favored by international investors, and the exchange rate is gradually rising.
In the short term, the "safe haven" nature of RMB assets and exporters' demand for foreign exchange settlement and sales are expected to support a continued strong exchange rate.
Han Fuling, a finance professor at the Central University of Finance and Economics, said China's export growth reached a record high in 2021, and foreign trade growth could slow in 2022.Affected by related factors, he predicted that the recent high against the dollar, the future will be relatively stable, two-way fluctuation, rise and fall are normal.
The rouble has plunged by 30%!
Since the outbreak of the conflict on February 24, the Russian ruble has been falling continuously.
On February 24, the Russian ruble fell to 1:86 against the US dollar, the lowest level since January 2016.The ruble fell to 1:99.99 against the euro, the lowest level since December 2014.
But this is just the beginning.At 15:30 PM on February 28, Beijing time, the rouble fell to 109 ruble against 1 against the dollar, down more than 30%, far exceeding the important psychological threshold of 1 dollar against 100 rubles, again setting a new historical record.
On February 28, the Russian central bank raised the index interest rate from 9.5% to 20%.The statement released by the central bank said the external environment of the Russian economy had changed dramatically, with the key interest rate increase aimed at maintaining financial and price stability and protecting citizens' savings from currency depreciation.The dollar fell against the ruble after the central bank raised interest rates, after closing at 94.6 and with a retracement of 13%.
But Russian residents have started queuing to ATM to withdraw foreign exchange in case the rouble continues to plunge.
Currently in Russia, as of February 27, the large supermarket chain of bread, eggs, milk and other common food prices did not appear obvious ups and downs, but home appliances, mobile phones, cars and other high value commodity pricing and sales are affected by the devaluation of the rouble, there have been many students in Russia in the social media platform launched luxury goods on behalf's agent.
The exclusion of some Russian banks from the SWIFT payment system means that it will cut them off from the global banking system and will be unable to make cross-border payments, thus affecting international trade.
Therefore, in the field of foreign trade, many Russian customers come to ask whether the payment can be changed to RMB; on the other hand, many Ukrainian customers have suspended orders, and many Eastern European customers (such as Poland) customers are also affected.
How do foreign traders avoid the risk?
At present, the risks facing our foreign trade industry are mainly in three aspects:
Russia accounts for about 6% of the world's aluminum production and about 7% of the global nickel production.Tensions, increased the supply risk in the market, aluminum, nickel prices soared.Aluminum, nickel and other raw materials rose, enterprise costs rose.
Exchange rate fluctuations increase, and costs are difficult to calculate.
Some Eastern European enterprises are affected by the situation and the exchange rate, and the risk of our collection increases.
We should be prepared immediately in these areas:
01 Exchange rate risk control
Understand the internal logic of the exchange rate fluctuation of RMB, US dollar and euro;
Reasonable response to RMB exchange rate fluctuations to prevent eating up profits.
02 Foreign Exchange collection security control
Changes in SWIFT after the out of Russia and response;
Future response to Russian trade;
Tips for receiving payment from Eastern Europe customers.
03 Raw material cost control
It is recommended to start the material preparation as early as possible.
Post time: Mar-07-2022