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The influence of depreciation of wire and cable companies

by:AAA     2020-04-12
( Industry news] Depreciation on the influence of the wire and cable enterprise ZHDLDJ P for decision by the People's Bank of China recently targeted for financial institutions to implement directional drop, the agricultural bank of China chief economist, said yuan depreciation objectively existing trends or requirements, then such an important depreciation for electrical industry especially the wire and cable industry which influence will come? In the first place in terms of positive impact, benefit is the first wire and cable companies with export demand. A country's currency appreciation and depreciation is mainly manifested in the other country's currency exchange rate for a currency, the exchange rate. Devaluation of the yuan means foreign currency purchasing power, this is for wire and cable products export product price lower. Under the same conditions, the price is low wire and cable products will surely have stronger competitiveness, so the depreciation is good for wire and cable products export. And, more importantly, our country at present has become the world's largest wire and cable production, domestic demand has nearly saturated, export wire and cable products at this time is not only the profit, but also the trend of The Times. Again, depreciation in financing and export demand for wire and cable enterprise is good at the same time, also brought a big impact in other ways, the first is the real estate industry. The RMB exchange rate fell directly down to 'carry' space, is likely to prompt a previously entered the Chinese market of foreign capital flight, make these funds invest in asset prices. The real estate market is the most popular place of 'hot money'. Previously, foreign funds by holding property enjoy double benefits of rising house prices and exchange rates to rise. Yuan if access to depreciate, the benefits of hot money to invest in real estate market will shrink, coupled with the adjustment of the real estate market itself, the pursuit of high yield of the 'hot money' may retreat, causing a drop in prices. As is known to all, the real estate industry is the big customer of wire and cable enterprise, real estate slump will inevitably lead to a drop in demand for domestic wire and cable, and adverse effects on the wire and cable companies. In addition, the depreciation for some raw materials imports of wire and cable companies is also a big impact, because the yuan would increase the cost of imports of raw materials, further reduce the wire and cable companies already meager profits. But don't worry too much, on the other hand, although the yuan has depreciated trend, but a combination of factors the annual depreciation rate no more than %; As a professor of finance at Yale university, on the other hand, Chen zhiwu in an interview with the media, 'yuan depreciation necessity is very large, both for private enterprises, or for a national level, is extremely advantageous. 'So, overall, depreciation for wire and cable companies or not do more harm than good.
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