The risk of exchange rate fluctuations is increasing, and companies urgently need risk management. The fluctuations in the RMB exchange rate have increased the exchange rate risk for import and export enterprises. For export companies, if the order cycle is long, the appreciation of the RMB from the signing of the contract to the receipt of payment will reduce the actual amount of RMB received by the company, resulting in exchange losses. Similarly, for import companies, if the payment cycle is long, the depreciation of the RMB will increase the actual amount of RMB paid by the company, raising costs. Therefore, companies urgently need to strengthen exchange rate risk management, using financial instruments such as forward foreign exchange contracts, foreign exchange options, and currency swaps to lock in exchange rate risks and avoid losses caused by exchange rate fluctuations. At the same time, companies should also optimize settlement methods, shorten settlement cycles, and reduce exposure to exchange rate risks.
Experts predict and forecast that the RMB exchange rate is expected to break "7". Regarding the future trend of the RMB exchange rate, the market generally holds an optimistic attitude, with several experts predicting that the RMB against the US dollar is expected to appreciate further, even breaking the important psychological barrier of 7.0. Expert opinion: The RMB is likely to break "7" in the future. Hu Jie, a professor at the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University, stated that as the US dollar enters a rate-cutting cycle again, it is favorable for the appreciation of the RMB against the US dollar. In the future, close attention should be paid to changes in the US-China trade deficit, as well as the inflow of foreign capital. He predicts that the RMB will strengthen overall in the coming period.
Wang Qing, chief macro analyst at Dongfang Jincheng, pointed out that market expectations for further significant interest rate cuts by the Federal Reserve before the end of the year are heating up, leading to a significant decline in the US dollar, which brings strong passive appreciation momentum to non-US currencies, including the RMB. He judges that in the short term, the RMB will remain in a relatively strong operating state, and there is a high possibility that the RMB against the US dollar will break 7 before the end of the year. Gao Min, chief economist at Zhonghui Futures, believes that the market expects the Federal Reserve to continue cutting interest rates in the future, and a weaker US dollar is a high-probability event. Under multiple factors, the RMB exchange rate is expected to continue to appreciate, and it is anticipated to reach the "7" mark by the end of the year.
Xue Hexiang, director of the Research Institute of Shenwan Hongyuan Futures, reminds that based on historical experience, there is no inherent rule for the trend of the RMB exchange rate after the Federal Reserve cuts interest rates. However, since the fourth quarter of last year, China's economy has gradually stabilized and rebounded, the economic structure transformation has deepened, and in the future, the "anti-involution" policy and the expansion of domestic demand policy will work together to boost endogenous economic growth momentum. The steady recovery of China's economy will provide solid support for the appreciation of the RMB.
Analysis of the sustainability of the RMB exchange rate appreciation. In the short term, the momentum for the appreciation of the RMB exchange rate remains strong. The warming of expectations for interest rate cuts by the Federal Reserve and the weakening of the US dollar index provide room for appreciation of non-US currencies such as the RMB. At the same time, the steady growth of the Chinese economy, the expansion of trade surpluses, the continuous inflow of foreign capital, and the effective guidance of the central bank all provide strong support for the stability and appreciation of the RMB exchange rate.
From a medium to long-term perspective, the trend of the RMB exchange rate will depend on the recovery process of the Chinese economy and changes in the global economic situation. If the Chinese economy can maintain medium to high-speed growth, promote economic structure adjustment and transformation and upgrading, and improve the quality and efficiency of economic development, then the RMB exchange rate will have a solid foundation for continuous appreciation. However, global economic uncertainty, the rise of trade protectionism, and increasing geopolitical risks may also impact the RMB exchange rate.
Potential risks and responses to the appreciation of the RMB exchange rate. Although the trend of RMB exchange rate appreciation is obvious, potential risks also need to be addressed. On one hand, the appreciation of the RMB may put significant pressure on export companies. If the appreciation is too large or too fast, it may lead some companies into difficulties, even affecting employment and social stability. On the other hand, the appreciation of the RMB may trigger short-term speculative capital inflows, increasing volatility in the financial markets and even creating asset bubbles.
Therefore, the government and regulatory authorities need to closely monitor the dynamics of the exchange rate market, strengthen macro-prudential management, and prevent shocks from cross-border capital flows. At the same time, support for export companies should be increased through fiscal and financial measures to help companies reduce costs, transform and upgrade, and enhance their ability to cope with exchange rate risks. In addition, expectations management in the exchange rate market should be strengthened to guide the market to rationally view exchange rate fluctuations and avoid excessive speculation and the spread of panic.
Policy recommendations and corporate strategies to respond to new trends in exchange rate fluctuations. In the face of the new trend of the RMB exchange rate, the government, enterprises, and investors all need to take corresponding measures to actively respond to the impacts of exchange rate fluctuations. At the government level: strengthen macro-control and optimize exchange rate policies. The government should continue to implement a prudent monetary policy, maintain reasonable stability of the RMB exchange rate, and avoid large fluctuations in the exchange rate. At the same time, it should strengthen regulation of the foreign exchange market, crack down on speculative trading behaviors, and maintain market order. In addition, support for the real economy, especially export enterprises, should be increased through tax reductions, financing convenience, and support for technological innovation to help companies reduce costs and improve competitiveness.
At the enterprise level: strengthen risk management and enhance competitiveness. Import and export enterprises should enhance their awareness of exchange rate risks, actively use financial instruments for exchange rate risk management, and reduce the impact of exchange rate fluctuations. At the same time, they should accelerate transformation and upgrading, improve the technological content and added value of products, and enhance non-price competitiveness. In addition, enterprises should optimize market layout, explore diversified markets, reduce dependence on a single market, and disperse market risks. At the investor level: rationally view exchange rate fluctuations and optimize asset allocation. Investors should rationally view the fluctuations of the RMB exchange rate, avoiding blind following and speculative behavior. In asset allocation, they can appropriately increase the proportion of RMB assets to diversify investment risks. At the same time, they should pay attention to global economic conditions and policy changes, timely adjust investment strategies, and seize investment opportunities.
The offshore RMB against the US dollar has broken the 7.10 mark, which is the result of multiple factors working together, marking the RMB exchange rate entering a new stage. This trend has profound implications for China's import and export trade, bringing both challenges and opportunities. Looking ahead, the RMB exchange rate is expected to continue to remain strong, even breaking the important psychological barrier of 7.0. However, the fluctuations in the exchange rate market are complex and variable, requiring the government, enterprises, and investors to work together to strengthen risk management, actively respond to the impacts of exchange rate fluctuations, and promote high-quality economic development.