Research on the Exchange Losses of Multinational Corporations

Business Institute, Macau University of Science and Technology, 999078, Macau, China

^* Corresponding author: 1220031019@student.must.edu.mo

Abstract

In the wave of global trade and investment, foreign currency transactions are increasingly frequent, and the risk of currency mismatch is prominent. Academia and industry are deeply studying its impact on the accounting conservatism of enterprises, and seeking to effectively manage this risk through financial derivatives and other means. This paper proposes a solution to introduce a third-party financial platform as an intermediary bridge on the basis of cross-currency interest rate swaps. The proposed model aims to significantly broaden the scope of CCIRS applications, making it easy for more multinational companies to use this financial tool to manage their exposure to exchange rate and interest rate risks. Looking ahead, with the deepening of global economic integration, the exchange rate and interest rate risks faced by multinational enterprises will become increasingly complex and volatile. The cross-currency interest rate swap model based on third-party financial platforms proposed in this paper is expected to provide a practical and efficient risk management tool for many multinational enterprises, help them move forward steadily in the global market, and contribute to the in-depth development of economic globalization.