Question
A Chinese boat maker exports boats to U.S.-based distributors. The Chinese company makes less money on these sales decline when the Chinese currency (the yuan)
A Chinese boat maker exports boats to U.S.-based distributors. The Chinese company makes less money on these sales decline when the Chinese currency (the yuan) is strong vs. the USD. The manufacturer could reduce its economic exposure by:
Hedging the USD-yuan exchange rate
Forcing the distributors to pay for the boats in yuan.
Reducing the cost of the boat in USD
Producing the boats in Mexico with peso-based suppliers
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The Future Of Money How The Digital Revolution Is Transforming Currencies And Finance
Authors: Eswar S. Prasad
1st Edition
0674258444, 978-0674258440
