There is a view that allowing differential delivery in forward settlement and sale of foreign exchange means that the central bank is consciously relaxing the principle of real demand for settlement and sale of foreign exchange, which in fact encourages speculation in the foreign exchange market and helps to enhance the activity of the domestic market and further marketization of the RMB exchange rate formation mechanism.
The author believes that this view is partly correct at best, that is, differentiated delivery may indeed relax the principle of real demand for foreign exchange settlement and sale to a certain extent, but it may not be too much to say that the central bank is encouraging speculation.
For enterprises, due to the complexity of foreign trade and economic cooperation, it is often difficult to determine the specific time of receiving and paying foreign exchange. Under the condition of full delivery, enterprises are likely to face the risk of default on the expiration date of forward foreign exchange settlement and sale contracts.
For example, an export enterprise signed a three-month forward settlement contract with a bank, amounting to $654.38 billion, but after three months, the enterprise only received $80 million in payment. Assuming that the execution exchange rate of the contract signed by the enterprise is 6.5 and the spot exchange rate of the maturity date is 6.2, although the price is extremely favorable to the enterprise, in the case of full delivery, the enterprise will bear the risk of default because it is 20 million dollars worse than the contract. In the case of differential delivery, enterprises can still get 30 million RMB hedging income from banks while temporarily retaining their foreign exchange positions, which is undoubtedly a great good thing for enterprises.
The reason why banks sign forward settlement contracts of 1 billion dollars with enterprises is that enterprises can provide relevant evidence (export contracts, customs export documents, etc.). ) think that there will be 1 billion dollars in the future. However, because the enterprise does not have 1 100 million USD at the expiration date of the contract, it not only avoids the risk of default, but also breaks through the principle of real need when the enterprise and the bank make differential delivery to some extent.
But a certain degree of breakthrough does not mean a comprehensive breakthrough, nor does it mean that the central bank is encouraging speculation. Because it is clearly stated in the notice, whether it is differential delivery or full delivery, we must adhere to the principle of real needs. In the above case, this means that although the enterprise still holds $80 million after the differential delivery with the bank, in principle, the enterprise can only sell this $80 million in the spot market. As for whether the enterprise sells in one lump sum or in installments, whether it sells in ICBC or CCB, that is the freedom of the enterprise, but the enterprise can no longer sign a forward settlement contract with the bank for this $80 million. In the future, when another payment of $20 million arrives, the enterprise can only settle foreign exchange in the spot market, and cannot sign a forward settlement contract with the bank based on this late $20 million.
Some friends may ask, can't enterprises sign forward foreign exchange settlement and sale contracts with banks many times by forging contracts, and then realize exchange rate speculation? Logically, it does make sense, but in practice, the risk is not small. If enterprises speculate on the exchange rate by forging the trade background, there will inevitably be a mismatch between the cash flow in their bank accounts, the cargo flow counted by customs and the transaction data of foreign exchange settlement and sale with banks. Under the current regulatory technical conditions, this mismatch is easy to find. Once discovered, enterprises are faced with unbearable heavy penalties, so generally, regular operating enterprises of a certain scale dare not take this risk.
In short, although the forward settlement and sale of foreign exchange will break through the principle of real demand to a certain extent, it is difficult to encourage market speculation as long as the foreign exchange bureau adheres to the framework of the principle of real demand. Of course, this system design is indeed of great benefit to enterprises in managing exchange rate risks.