The exchange rate, also known as the foreign exchange market or foreign exchange rate, refers to the exchange rate between two currencies, and can also be regarded as the value of one country’s currency against another. In particular, it refers to the ratio or price comparison of one country’s currency to another country’s currency, or the price of another country’s currency expressed in one country’s currency.
What impact does the change in exchange rate have on import and export companies? Exchange rate changes play a direct role in regulating a country’s import and export trade. Under certain conditions, the depreciation of the domestic currency against the outside world, that is, the decline in the exchange rate, will play a role in promoting exports and restricting imports; on the contrary, the appreciation of the domestic currency against the outside world, that is, the rise in the exchange rate, will play a role in restricting exports and increasing imports.
Short-term capital flows are often significantly affected by exchange rates. When the local currency shows a depreciation trend, domestic and foreign investors are reluctant to hold various financial assets denominated in local currency and convert them into foreign exchange, resulting in capital outflows. At the same time, due to the transfer of foreign exchange, the shortage of foreign exchange supply is aggravated, which will push the local currency exchange rate further down. On the contrary, when the local currency shows an appreciation trend, domestic and foreign investors strive to hold various financial assets denominated in local currency, resulting in capital inflows. At the same time, as foreign exchange is transferred to local currencies, the supply of foreign exchange exceeds demand, which will promote the further rise of the local currency exchange rate.
According to Article 15 of the “Detailed Rules for the Implementation of the Provisional Regulations on Value-Added Tax”, for foreign currency settlement, the RMB mid-price can be selected on the day the business occurs or on the first day of the same month. The tax bureau’s tax refund review system adopts the mid-price announced by the People’s Bank of China on the first working day of each month as the declared exchange rate.
How do export companies check the monthly exchange rate?
The first method is to check the website of the People’s Bank of China and look for the RMB exchange rate mid-point announcement to see the exchange rate for each working day.
The second method is to visit the State Administration of Foreign Exchange for inquiries.
The third method: check the export tax rebate comprehensive service platform.