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How to strengthen the risk management of foreign exchange transactions of multinational corporations
The goal of foreign exchange risk management is to make full use of effective information and strive to reduce the uncertainty of cash flow caused by exchange rate fluctuations. Control or eliminate the adverse effects of exchange rate fluctuations that may be faced in business activities. In order to achieve this goal, foreign exchange risk management should follow the following principles: (1) The principle of overall concern. Require government departments, enterprises or individuals with foreign-related economic business to attach great importance to foreign exchange risks in their own economic activities. There are different types of foreign exchange risks. Some enterprises only have transaction risks, while others have economic risks and conversion risks. Different risks have different effects on enterprises, some of which are beneficial and some are unfavorable. Therefore, foreign-related enterprises and multinational companies need to keep a clear mind on foreign exchange risks under foreign exchange transactions, international settlement, accounting conversion, future capital operation of enterprises, international financing costs, transnational investment income, etc., so as to have a well-prepared plan and avoid paying attention to one thing and losing another. Causing heavy losses, (2) the principle of diversification. Require foreign-related enterprises or multinational companies to manage foreign exchange risks flexibly and diversely. Different business scope, background characteristics and management style of enterprises have different foreign currency volatility, foreign currency net position, correlation between foreign currencies and foreign exchange risk. Therefore, every enterprise should analyze the specific situation and find the foreign exchange risk tactics and specific management methods that are most suitable for its own risk situation and management needs. As time goes by. External constraints will change constantly, so the foreign exchange risk management strategy of enterprises needs to be changed accordingly. Enterprises can't cling to the shortcomings and adopt only one foreign exchange risk management method for a long time. (3) the principle of maximizing income. Require foreign-related enterprises or multinational companies to accurately calculate the costs and benefits of foreign exchange risk management. Under the premise of ensuring the expected goal of risk management, we should spend the least cost and pursue the maximum benefit. This is the cornerstone and starting point of foreign exchange risk management of enterprises, and it is also the standard for enterprises to determine specific risk management strategies and choose foreign exchange risk management methods. Foreign exchange risk management is essentially a kind of risk transfer or distribution. For example, if financial instruments such as forward foreign exchange transactions, options, swaps and futures are used for hedging, it is necessary to pay a certain cost to fix future income or expenditure at the cost, so as to protect the cash flow of enterprises from exchange rate fluctuations. Generally speaking, the lower the cost of foreign exchange risk management, the greater the income after risk management, and the higher the enthusiasm of enterprises to manage their foreign exchange risks, and vice versa.