People can't go back, and money can't go back either! The new US Treasury Secretary said: Cross-border sellers please stop losses in time...

People can't go back, and money can't go back either! The new US Treasury Secretary said: Cross-border sellers please stop losses in time...




As the epidemic strikes again, various provinces and cities have issued notices on the prevention and control of the new crown epidemic;

With a series of policies such as isolation, nucleic acid testing, and subsidies, many cross-border migrant workers can only celebrate the New Year where they are.


"Reunion has become a luxury, so why not stay and earn more money! "


However, the exchange rate has continued to fall in recent days, and some sellers have said: " People can't go back, and the money can't go back either! "





"Experts: Exchange rate continues to fall and will return to equilibrium level"



"At the end of 2019, a batch of goods worth $100,000 was not shipped. At that time, the exchange rate of RMB to USD was around 7. When the settlement was made, the exchange rate became 6.45. After conversion, it was equivalent to a loss of 60,000 RMB."


In 2020, the offshore RMB exchange rate against the US dollar adjusted from a low of 7.19 to around 6.45 since the end of May. This year, the RMB exchange rate has continued to rise . As of January 27, the offshore RMB exchange rate against the US dollar was around 6.4665 .

The appreciation of the RMB exchange rate against the US dollar and the increase in external purchasing power are good things, but they are a big problem for companies that mainly engage in cross-border export business .

On the 5th of this month, the onshore RMB exchange rate against the US dollar rose above 6.43 and is currently fluctuating around 6.46.

Since the exchange rate reform in 2005, the highest point of the RMB exchange rate was 6.04 in 2014. The recent high of the RMB exchange rate has a 7% appreciation space from the historical high, and the appreciation of the RMB exchange rate since May 2020 is about 10%. This has also aroused the attention of the outside world on whether the RMB exchange rate against the US dollar will "break 6" this year .

Regarding the trend of the RMB exchange rate this year, Liang Ming, director of the Foreign Trade Institute of the Chinese Ministry of Commerce Research Institute, believes that domestic factors in the United States are an important factor: if the Biden administration smoothly transitions after the 20th and the US economy moves towards a normal state, then the RMB against the US dollar will not be able to appreciate continuously and on a large scale. "Generally speaking, I think the RMB against the US dollar will return to equilibrium, for example, return to around 6.8, 6.9 or 7 , which will be an equilibrium level." He said.



The US "new Treasury Secretary" stated: The future trend of the US dollar is determined



Recently, U.S. Treasury Secretary Janet Yellen attended an event and made it clear that the United States will not seek a devaluation of the dollar for competitive advantage .



Foreign media said that officials responsible for reporting to Yellen said that if asked about the new government's dollar policy, Yellen is ready to answer: " The value of the dollar and other currencies should be determined by the market , which will adjust to reflect changes in economic performance and generally promote adjustments in the global economy."



How should small and medium-sized enterprises cope with the continuous volatility of the US dollar?



Faced with the continued upward trend of the RMB exchange rate against the US dollar, some cross-border companies choose to hedge risks through forward contracts, exchange rate locks, hedging , etc., but for small and medium-sized enterprises, the response methods are still relatively limited.


How to predict the exchange rate trend and adopt reasonable means to deal with it is an important test for enterprises. Compared with large enterprises, the economic strength of small and medium-sized enterprises is relatively weak. In addition, there is a lack of professional financial talents and financial knowledge. Faced with the costs, risks and thresholds of various financial instruments, it is inevitable that they are confused, and their regulatory capabilities and means are relatively weak.


In this regard, professionals said that small and medium-sized enterprises can eliminate, transfer and hedge the risk of RMB appreciation through financial instruments , reduce risk exposure to a relatively low level, and choose appropriate times to settle foreign exchange to actively respond to exchange rate fluctuations.


ask

How to solve the problem of withdrawing funds?

Cross-border remittance procedures are cumbersome and time-consuming, and sellers inevitably worry about the safety of funds in transit.


Withdraw cash in seconds


Exchange rate transparency

There is no denying that the current cross-border e-commerce market is already a red ocean, and the capital chain is comparable to the lifeline of sellers. Especially in 2021, with the volatility of the market, a continuous and stable capital flow is becoming more and more important . Faced with the uneven cross-border payment institutions in the market, sellers need to re-sort out the payment channels of funds to ensure safe and stable operating returns .

Taking CITIC Bank's global cross-border e-commerce payment product - " CITIC Bank Zhihui " as an example, the settlement time is freely determined by the seller, and the settlement is made at an appropriate time based on specific funding needs to avoid exchange losses and ensure that the funds are deposited in real time.

  • The exchange rate of "Xinyin Zhihui" is transparent and can be checked at any time on the official website

  • The most important thing is that the funds can be deposited into the account extremely quickly and cash can be withdrawn within seconds. For small and medium-sized sellers, this is a "life-saving straw".

  • The fee rate is only 0.2%.



(Source: Cross-border Sellers Teahouse )


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