Will the renminbi's rise outweigh the risks?

It is known that our country is a big textile export country, while the United States is one of the main export destinations in our country. For export-oriented textile enterprises, the appreciation of the renminbi has brought certain pressure. When textile enterprises receive the payment settled in US dollars, needs to be converted into RMB. However, due to the appreciation of RMB, the amount of RMB converted into is reduced, , which directly affects the earnings of textile enterprises.

In the view of the industry, affected by the weakening of key US economic data, cooling inflation data and other factors, the market's expectation of the Federal Reserve's interest rate cut has risen significantly, driving the US dollar index to fall further. Before the Federal Reserve began to raise interest rates in 2022, the RMB exchange rate against the US dollar for a long time hovered between 6.3 and 6.8, and after the Fed raised interest rates, the exchange rate broke through the 7.3 mark.

At the root, this round of strong recovery of the RMB reflects the market's positive expectations for the strengthening of the domestic economy. Relevant data show that in the first half of this year, China's manufacturing industry successfully earned a large number of foreign trade surplus.

Therefore, in the short term, exchange rate fluctuations may cause textile enterprises to suffer some losses, but in the long run, the advantages outweigh the disadvantages, and the strengthening of the RMB exchange rate is an inevitable trend.

In general, whether it is the rise and fall of freight rates or exchange rate fluctuations, these are the regular adjustment mechanisms of the market. As an important participant in the market, textile enterprises can not directly control these external factors, but they can adapt to and respond to these changes through flexible strategies, such as leaving room for cost accounting.

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