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The Influence of US Dollar Exchange Rate on Foreign Trade Import and Export

Recently, the exchange rate of the US dollar against the RMB has been rising, breaking through 7.0. What impact does this have on China’s foreign trade export industry? How should we deal with it?

The determination method of exchange rate changes with the change of international monetary system, and the change of exchange rate will have different effects on economy and trade.

The details are as follows:

The impact of exchange rate on imports and exports: the decline of exchange rate can promote exports and inhibit imports. (Foreign exchange rate rises, while local currency exchange rate falls)

The impact of exchange rate on prices: the decline of exchange rate will lead to an increase in the overall level of domestic prices; The increase of exchange rate plays a role in curbing inflation.

Influence of exchange rate on capital flow: exchange rate has little influence on long-term capital flow. In the short term, the exchange rate depreciates; Capital outflow; Exchange rate appreciation is conducive to capital inflow.

Impact on balance of payments

The impact on trade balance: the impact of exchange rate on imports and exports: the decline of exchange rate can promote exports and inhibit imports. (Foreign exchange rate rises, while local currency exchange rate falls)

2. The impact of exchange rate on prices: the decline of exchange rate will lead to an increase in the overall level of domestic prices; The increase of exchange rate plays a role in curbing inflation.

3. Influence of exchange rate on capital flow: exchange rate has little influence on long-term capital flow. In the short term, the exchange rate depreciates; Capital outflow; Exchange rate appreciation is conducive to capital inflow.

As foreign traders, we should maintain sensitivity to exchange rates, respond to various situations in the process of foreign trade export in a timely manner, and do a good job in market.

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Post time: Sep-19-2022