BUSINESS Bank helps companies avoid exchange rate risks

BUSINESS

Bank helps companies avoid exchange rate risks

Global Times

14:03, June 29, 2018

The Agricultural Bank of China is showing some companies in the Shanghai Free Trade Zone how to avoid exchange rate risks by means of exchange rate hedging products, as the escalating Sino-US trade war exerts great pressure upon the yuan's exchange rate against the US dollar.

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Photo: VCG

Lin Lin, deputy general manager of the international finance department under the Agricultural Bank of China's Shanghai branch, said on Thursday that many companies in the Shanghai Free Trade Zone (FTZ), particularly small and medium enterprises, still have not yet fully realized the importance of hedging against exchange rate fluctuations. 

She stressed that hedging against the exchange rate is not necessarily a profitable move for the companies, which is a reason why some are hesitating about investing in relevant products. 

The yuan's central parity exchange rate against the US dollar lowered by 391 basis points on Thursday, data from the People's Bank of China, China's central bank, showed. 

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