1) Select the contract currency. In foreign trade, lending and other economic transactions, the choice of the signing currency as the pricing and settlement currency is directly related to whether the transaction subject will bear the exchange rate risk. The following basic principles can be followed when choosing the contract currency: First, strive to use the domestic currency as the contract currency. Second, the export and loan capital output strive to use coins, that is, the currency with an appreciation trend in the foreign exchange market.
2) Add currency hedging clauses to the contract. Currency hedging refers to selecting a currency with a stable currency that is inconsistent with the contract currency, converting the contract amount into the selected currency, and completing receipt and payment in the contract currency according to the amount expressed in the selected currency during settlement or settlement. At present, the currency hedging clause used in various countries is mainly a "basket" currency hedging clause, that is, multiple currencies are selected to hedge the contract currency, that is, when signing a contract, the exchange rate between the selected currency and the contract currency is determined, and the weight of each selected currency is specified. If the exchange rate changes, the contract currency amount of receipt and payment will be adjusted accordingly according to the current exchange rate change range and the weight of each selected currency during settlement or settlement.
3) Adjust the price or interest rate. In a transaction, neither party can win a favorable contract currency. When one party has to accept an unfavorable currency as the contract currency, it can try to adjust the price or interest rate in the negotiation appropriately: for example, it is required to appropriately increase the export price settled in soft currency or the loan interest rate settled in soft currency; It is required to appropriately reduce the import price settled in coins or the loan interest rate settled in coins. After the transaction contract is signed, foreign-related economic entities can use the foreign exchange market and money market to eliminate foreign exchange risks. The main methods are cash transaction, forward transaction, futures transaction, option transaction, loan and investment, loan-cash transaction-investment, foreign currency bill discount, interest rate and currency swap, etc.
1) cash transaction. Here, it mainly means that foreign exchange banks use spot transactions in the foreign exchange market to balance their daily foreign exchange positions.
2) Borrowing and investing. It refers to the purpose of eliminating foreign exchange risks by creating debts or creditor's rights with the same currency, amount and term as future foreign exchange income or expenditure.
3) Discounting foreign currency bills. This method is not only conducive to speeding up the capital turnover of exporters, but also conducive to eliminating foreign exchange risks. When the exporter provides financial convenience to the importer and has a forward foreign exchange bill, he can take the forward foreign exchange bill to the bank for discount, get foreign exchange in advance and sell it to get local currency cash. In addition to the above-mentioned methods of signing contracts and financing, there are also some methods, mainly: ahead of time or after mistakes, pairing, and insurance.
1) Advance or postpone the collection and payment of foreign exchange. It refers to that foreign-related economic entities advance or make mistakes in the settlement date or settlement date of foreign exchange receipts and payments according to the trend forecast of the exchange rate of the denominated currency, so as to prevent foreign exchange risks or gain gains from exchange rate changes.
2) match. It refers to a practice that a foreign-related entity conducts another transaction with the same currency, amount and date of receipt and payment, but the capital flows in the opposite direction, so that the exchange rate changes faced by the two exchanges offset each other.
3) insurance. It means that foreign-related entities apply for exchange rate change insurance with relevant insurance companies, and once they suffer losses due to exchange rate changes, the insurance companies will give them reasonable compensation. The insurance of exchange rate risk is generally borne by the state.