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  3. Exchange Risks Your company will do business with several companies fr

Exchange Risks Your company will do business with several companies fr

游客2025-06-03  31
问题    Exchange Risks   
   Your company will do business with several companies from several countries. Since several currencies of more than one country will be involved and there may have exchange risks of using foreign currency. You have been asked to submit your suggestions on how to deal with the exchange risks. Discuss, and decide together:
•How many ways can be used to deal with the exchange risks of foreign currency?
•Which way may be the best way for your company to deal with the exchange risks of foreign currency?
选项
答案 Interviewer: Well, Song Ying and Meng Liang, the last part of this speaking test is a discussion task. Your discussion topic is on this tesk card. You have about 30 seconds to read it carefully. After you have read the task, you will have a discussion on the given topic.  Your discussion time is around three minutes. OK? Now read your task card.
  Well, can you start your discussion now? I’m going to listen to you and then ask you to stop at the end of three minutes.
Meng Liang: Eh, one easy way, I think, if we are the seller, is to insist on receiving payment in our own currency. This puts the risk in the hand of the buyer, but the buyer may not always be willing to accept this risk. Another way is to share the risk by arranging a portion of the payment to be made in each country’s currency. But it means every side will take some sort of risk.
Song Ying: Those two ways are quite simple and direct ways to deal with the exchange risks. But if it is necessary to accept payment in a foreign currency, what should we do in your opinion?
Meng Liang:  Well, one way is to include the estimated cost of the currency change into the deal to protect against potential loss.
Song Ying: But I think it will not protect us completely since it is only an estimate. How about banks? Banks may be willing to assume the risk  of  currency’ fluctuations  with  foreign currency letter of credit.
Mens Liang: We will pay for this service and it seems to be quite costly. If all of us, I mean all the companies will not agree to assume the risk of currency fluctuations,  I think choosing a strong and stable currency of another country is a good way.
Song Ying: Eh, have you heard of hedge which is also  a  method  of  managing  currency  in international trade transactions like us?
Meng Liang: Yes, and there are three common methods of hedging. They are: Forward Market Hedge,  Money  Market  Hedge  and  Options Market. I think the Money Market Hedge is the best way for our company to deal with the exchange risks since we can convert our currency into foreign currency now, at the current rate. Our  currency  fluctuations  won’t  affect  the amount of benefits.
Song Ying: Yeah, I agree with you and this method is also fair for both sides.
Interviewer:   Have  had  any  experience  of exchanging currencies?
Meng Liang: Yes, I exchanged RMB to English Pounds since I went to Britain for further study.
Song Ying: I didn’t go abroad. I exchanged RMB to HKD for going to Hong Kong to have a sightseeing.
Interviewer:   Did   the   currency   fluctuation influence you?
Song Ying: I only had a short stay in Hong Kong and the exchange rates of those two currencies were relatively stable, so I didn’t [use money.
Mens Liang: Yea, since I went abroad for my further study, I needed to exchange RMB to British Pounds. I exchanged RMB one month in advance and I thought it was relatively low at that time. But four days before I went to Britain, the exchange rate fell down and it was much lower than my exchange rate. So I lost a lot of money.
Interviewer: Thank you, Song Ying and Meng Llang. That is the end of the speaking test.
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