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Strategy for stabilizing exchange rates: Chen Jia and Chen Jue respond to overseas currency turmoil

As Chen Jia and Chen Jue's financial business continued to expand overseas, they attracted many overseas businessmen to cooperate with them. However, new problems followed one after another. Overseas businessmen brought a variety of new currencies, and the currency exchange rate fluctuated frequently and was extremely unstable, which brought great troubles to their trade and financial transactions.

That day, Chen Jia and Chen Jue sat in the study, looking solemnly at the piles of financial statements and trade letters from all over the world on the table. Chen Jia sighed softly and broke the silence: "Husband, now overseas business is getting busier and busier, but the new currencies and unstable exchange rates are really a headache. Many overseas merchants come to trade with different currencies. We have to consider how to accept these currencies and deal with the losses caused by exchange rate fluctuations. In the long run, it will definitely affect our business."

Chen Jue frowned slightly, tapping the table with his fingers. After thinking for a moment, he said, "Madam, you are absolutely right. The unstable exchange rate is like a reef hidden in the sea of ​​trade, which may cause our commercial ships to run aground and be damaged at any time. We must come up with a response plan as soon as possible to stabilize the exchange rate and ensure smooth trade and financial exchanges."

Chen Jia picked up a letter from an overseas branch and said, "My husband, take a look at this letter. The branch said that the exchange rates between several major new currencies have fluctuated violently recently, and there may be large increases or decreases within a day. When we settle accounts, we often suffer losses due to exchange rate changes. Moreover, different regions have different preferences and usage habits for currencies, which makes the situation more complicated."

Chen Jue nodded and said, "Madam, we must first systematically sort out these new currencies, understand their circulation in various regions, their frequency of use, and their approximate exchange rate with Qing's currency. Then, based on this information, formulate corresponding exchange rate management strategies."

After thinking for a moment, Chen Jia said, "Husband, I think we can set up a special exchange rate research team composed of people who are proficient in the currencies and financial markets of various countries. They are responsible for real-time monitoring of exchange rate fluctuations, analyzing the factors that affect the exchange rate, and providing us with accurate exchange rate forecasts and response suggestions."

Chen Jue's eyes lit up and he said, "My lady, this is a very good idea. This group should not only pay attention to the real-time changes in exchange rates, but also study the economic policies and trade conditions of various countries in order to predict exchange rate trends in advance. At the same time, we can also cooperate with overseas banks and chambers of commerce to jointly deal with exchange rate fluctuations."

Chen Jia continued, "Yes, we can establish an information sharing mechanism with them to keep abreast of the dynamics of the local currency market. Moreover, when trading with overseas merchants, we can try to adopt some flexible settlement methods to reduce the risks brought by exchange rate fluctuations."

Chen Jue asked doubtfully, "Madam, what do you mean by flexible settlement method?"

Chen Jia explained: "For example, we can negotiate with overseas merchants to lock in the exchange rate within a certain period. During this period, no matter how the market exchange rate fluctuates, we will settle according to the pre-agreed exchange rate. Alternatively, we can adopt a multi-currency combination settlement method to reduce the impact of fluctuations in a single currency exchange rate on us."

Chen Jue nodded in agreement: "Madam, these methods are indeed feasible. But in actual operation, we still need to fully communicate with overseas merchants so that they can understand and accept these settlement methods. After all, they will also consider their own interests."

Chen Jia said: "This requires our negotiators to have good communication skills and financial knowledge. When communicating with overseas businessmen, we need to explain in detail the benefits of these settlement methods for both parties, which can not only protect our interests, but also provide them with certain exchange rate risk protection."

Subsequently, Chen Jia and Chen Jue took quick action. They selected several people from money houses and commercial banks who had in-depth knowledge of overseas financial markets and formed an exchange rate research team.

Chen Jue said to the team members seriously: "Everyone, now the money houses are facing the severe challenge of currency exchange rate instability, and you have a great responsibility. You must pay close attention to the changes in the exchange rates of various countries, deeply analyze the reasons behind them, and provide us with timely and accurate exchange rate forecasts and response strategies."

The team leader said confidently: "Don't worry, Duke. We will do our best. We have formulated a detailed monitoring plan. We will collect economic data, policy trends and other information from various countries in real time, and use professional analysis methods to provide reliable decision-making basis for the bank."

At the same time, Chen Jia began to arrange cooperation with overseas banks and chambers of commerce. She personally wrote letters to partners in various places, elaborating in detail on the current exchange rate issues and the idea of ​​cooperative response.

In the letter, Chen Jia wrote: "Dear partners, the current currency exchange rate fluctuations have brought many inconveniences to our trade. In order to jointly cope with this challenge, we propose to establish an information sharing mechanism to regularly exchange the dynamics of the currency markets of various countries. At the same time, we can explore some cooperation measures, such as jointly stabilizing the exchange rate and coordinating settlement methods, to protect the interests of both parties. I look forward to your reply."

Soon, overseas partners responded one after another, expressing their willingness to cooperate. The president of a Nanyang Chamber of Commerce wrote in his reply: "Mrs. Chen, your proposal is very timely and necessary. Our Chamber of Commerce is willing to work closely with your bank to jointly deal with the exchange rate problem. We can hold regular video conferences (assuming there is similar technology at the time) to share information and discuss response strategies."

Chen Jia looked at the reply and said to Chen Jue, "Husband, it seems that everyone has realized the seriousness of the problem and is willing to work together to solve it. Next, we will discuss the details of the cooperation with them."

During the video conference with overseas partners, all parties had in-depth discussions on the frequency and content of information sharing and specific measures to jointly deal with exchange rate fluctuations.

Chen Jia said: "Ladies and gentlemen, in order to grasp the exchange rate dynamics more timely, we suggest that we share the exchange rate changes, important economic data and policy adjustments of various countries on a regular basis every day. At the same time, in response to exchange rate fluctuations, we can jointly establish an exchange rate stabilization fund, and use the fund to intervene in the market when the exchange rate fluctuates sharply."

A bank owner in the Western Regions said, "Madam Chen, it is a good idea to set up an exchange rate stabilization fund, but the source of funds and the rules for using the fund need to be clarified. Moreover, how to ensure fairness and rationality in the use of the fund by various countries also needs to be carefully discussed."

Chen Jue went on to say, "This boss is absolutely right. We can determine the proportion of the fund's investment according to the trade scale and financial strength of each party. When using the fund, we will formulate a strict application and approval process to ensure that every penny of funds is used where it counts, and truly play a role in stabilizing the exchange rate."

After several rounds of discussions, the parties finally reached a preliminary cooperation agreement.

Communicating flexible settlement methods with overseas merchants is not always smooth sailing.

A businessman from an island country said, "Mrs. Chen, your proposal of locking the exchange rate and settling in multiple currencies makes sense, but we are also worried about the risks involved. For example, after locking the exchange rate, if the market exchange rate changes in a direction that is favorable to us, won't we suffer losses?"

Chen Jia patiently explained, "I completely understand your concerns. But locking the exchange rate also helps you avoid the risk of the exchange rate changing in an unfavorable direction. Moreover, we can reasonably set the scope and period of the locked exchange rate based on market conditions, and try to make it acceptable to both parties. As for the settlement of multiple currency combinations, it can disperse the exchange rate risk and ensure the safety of your funds. Just think about it, the fluctuation of the exchange rate of a single currency may bring greater losses, while with a combination of multiple currencies, this risk will be greatly reduced."

After Chen Jia's patient explanation, the businessman finally expressed his willingness to try these settlement methods.

With the hard work of the exchange rate research team, close cooperation with overseas partners and the gradual implementation of flexible settlement methods, Chen Jia and Chen Jue successfully dealt with the problem of unstable overseas currency exchange rates and ensured the stable development of their overseas trade and financial business. Their wisdom and decision-making have once again won wide acclaim in the business field and set a new example for Qingguo's overseas business expansion.