-The exchange rate is the most important comprehensive price indicator for a country’s international activities.

The exchange rate is the most important comprehensive price indicator for a country’s international activities, performing a price conversion function in international financial and international trade activities, thus becoming an important lever for a country’s trade balance, and its movement has a profound impact on a country’s foreign trade balance and domestic economic activities.
Recently, China’s central bank has continuously lowered the exchange rate and the RMB exchange rate has dropped significantly. As foreign trade people, by heart, for our export enterprises, the benefits of RMB devaluation outweigh the disadvantages.
With the devaluation of the RMB, the prices of some imported fabrics and accessories needed for garments have risen substantially. The same price of goods has led to an increase in our import costs as the amount of goods we have purchased has become less after the devaluation of the RMB.
However, in contrast, when we make a quotation in US dollars, for example, the exchange rate rises from 6.7 to 6.8, and $10,000 of goods are exported, a profit of ¥1000 can be made on the exchange rate. Conversely, if the RMB appreciates after the quotation is made, for example if the exchange rate falls from 6.7 to 6.6, selling goods of the same value will result in a profit loss of ¥1,000 due to the exchange rate.
Because of the epidemic, we faced a big rise in logistics and port costs, insufficient procurement and supply of raw materials, resulting in our inability to ensure the smooth completion of orders and a loss of trust to our customers; as well as the embarrassing current situation of losing new customers due to the increase in cost quotation.

Huaian Ruisheng International Trade Co., Ltd. operates in the foreign trade of garments, which is a traditional industry in the middle and low end. Industry experience shows that for every 1% devaluation of the RMB against the US dollar, the sales margin of the textile and garment industry will rise by 2% to 6%, and the profit margin will become larger, so that when quoting to foreign customers, we will relatively lower the quotation under the premise of ensuring the interests, so as to obtain pre-orders from old customers and increase the volume of trial orders from new customers.
In summary, if the depreciation of the RMB against the US dollar continues, the textile manufacturing industry will see an increase in profitability due to the high proportion of exports, which on the one hand will help us to reduce costs and improve the export competitiveness of our products, and on the other hand will help companies to gain exchange gains and losses.