When Chinese enterprises import, they need to pay foreign currency in exchange for goods or services.
, for import enterprises, is undoubtedly good, the cost will be greatly reduced.
Appreciation, relatively speaking, is the depreciation of the foreign currency.
Those who want to pay a fixed amount need to pay less RMB, thus reducing the cost of capital.
For example: a bank today is 652.45 (every 100 can be exchanged for 652.45 yuan.
The bank was trading at 655.45 a month ago.
The bank’s client wants to import a shipment of equipment from the United States for a total of $1 million.
If a customer buys $1 million a month ago, he needs 6,554,500 yuan.
Due to the appreciation of the yuan in one month, it is now 652.45 yuan, which is also 1 million dollars, and the need to pay 6,524,500 yuan.
Did you spend RMB30,000 less than a month ago?
Similarly, those who need to pay foreign exchange and import various resources from foreign countries, such as handling investment business, importing labor services, traveling, medical treatment, etc., and those who need to spend money, will save money.
In general, currency appreciation is bad for exports.
Export enterprises export commodities in exchange for foreign exchange.
For the same amount of foreign exchange, due to the appreciation of local currency and depreciation of foreign currency, the amount of RMB that can be exchanged back will be reduced, so the income will be reduced.
For example: A month ago, a customer of a bank exported a shipment of rice with a total value of $1 million.
At that time, the yuan was 655.45 to the U.S. dollar, or $1 million, which would bring back 6,554,500 yuan.
A month later, the customer exported another shipment of rice and received another $1 million in foreign exchange.
However, the current rate is 6,52.45, which means that $1 million can be exchanged for 6,524,500 yuan at the bank.
Is it 30,000 RMB less than before?
The company will lose Rmb30,000 as a result.
Similarly, those who need to exchange foreign exchange for RMB, such as foreign exchange earned by overseas labor services, the appreciation of domestic currency and depreciation of foreign currency, are relatively unfavorable.