Despite the spectacular economic development China has engineered, the use of the renminbi (RMB) has not grown at the same pace as the country’s industries. Many U.S. businesses that source from China continue to pay their suppliers in U.S. dollars. Doing so is convenient, and it eliminates foreign exchange (FX) risk in those transactions. It also costs more, and it puts these companies at a disadvantage compared with businesses that are willing to transact in RMB.
First, the London interbank offered rate (commonly known as Libor) is going up. And second, the dollar’s been going down. Until mid-October, the…
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Follow these 4 steps to help protect profit and avoid currency related losses while doing business across borders.
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