What shall I do when I want to import goods abroad but encounter dollar rising?

What shall I do when I want to import goods abroad but encounter dollar rising?

Recently,there is something having changed slowly.When you want to import goods abroad,and you prepare almost everything well.Then it is time for you to go to the bank to arrange the payment.However,to your surprise, the dollar currency rate has been rising so high.It means I have to pay more amount to exchange US dollars.
Are you encountering this situation now?
If so,please continue to read this article.This article is mainly to discuss the solution of this problem.
First,let’s make it clear,why has the dollar currency rate has been rising?This problem started from the Federal Reserve(short named FED)who issues US dollars.Since the beginning of 2018,the FED has raised interest rates for three times,respectively in March, June and September.After the US dollar raised interest rates, multinational currencies depreciate against the US dollar.In particular, the currencies of the Argentine peso, the Russian ruble, the Brazilian real, the Turkish lira, and the Philippine peso have depreciated sharply. At the same time, China’s RMB and Hong Kong currencies have also fluctuated greatly.
USD-vs-Chinese-Yuan

The above argument basically explains why you need to use more money to exchange dollars now.Faced with this fact, how to deal with the adverse effects of the appreciation of the dollar?
As an economist of Zhengzhou Hento Machinery Company,I have been doing international business for many years.I recommend you to pay by Chinese Yuan(RMB). Because the dollar has appreciated, but Chinese Yuan hasn’t raised interest rates. In fact, China has cut interest rates several times in disguise this year. As you know, Chinese Yuan is also an international currency.It is one of the five currencies that have been included in the IMF’s Special Drawing Rights (SDR) currency basket.
Someone asks me, now the US dollar exchange rate is so high, shall I stop purchasing and wait for a well?
Before I give advice to you,let’s take a look at the historical interest rate of the dollar.

US-dollar-history

Although the FED has raised interest rates several times in a row, there is still a considerable gap in the normalization level of interest rates of around 3%.The Fed’s expectation of the pace of interest rate hikes in the next two years will remain unchanged. According to the prediction of several authoritative organizations, the FED will raise interest rates once this year, and will raise interest rates three times and one time respectively in 2019 and 2020. In other words, it is a big probability that the dollar exchange rate will continue to rise in the next several years. So, in terms of the upward trend of the US dollar exchange rate, it is better to exchange US dollars now rather than tomorrow. This doesn’t take into account the earlier and more revenue you will receive if you import goods earlier. What is you opinion?

1 Comments

  • Do you know such ways to save moeny for inporting goods?

    Reply

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