Zhejiang's first exchange rate hedging business for small and micro enterprises guaranteed by a policy-based guarantee company officially landed in Yongkang on Jan 26.
To help foreign trade grow steadily, the Yongkang commerce bureau and Yongkang administration of foreign exchange have introduced policy-based guarantee companies to help SMEs avoid the risk of foreign exchange export exchange rate fluctuations.
Yongkang Jinlong Tool Manufacturing Co Ltd in Yongkang produces electric tools, which are exported to European and American countries, and the capital settlement is mainly in US dollars. The fluctuation of the RMB exchange rate against the US dollar has a great impact on its profits. Last year, the company's foreign trade exports declined by several hundred thousand dollars due to fluctuating exchange rates.
"Recently, exchange rate fluctuations have been frequent and large, and foreign exchange locking has become a necessary way for companies to avoid risks," said Chen Longchang, chairman of the Jinlong company.
In addition, under the new policy, SMEs do not need to pay guarantee money for exchange rate hedging business, helping enterprises save on capital costs.
