On August 17, the central parity rate of the RMB against the US dollar was reported at 6.7873, up 5 basis points from the previous trading day, reaching its highest level since February 8, 2023 and a three-and-a-half-year high. Earlier, the onshore RMB against the US dollar also briefly strengthened past the 6.75 mark, touching an intraday high of 6.7432.

Data shows that this round of RMB strength has lasted for some time. Since April 2025, the central parity rate of the RMB against the US dollar has gradually moved from around 7.2 to around 6.79, a cumulative appreciation of about 6%. Meanwhile, the US dollar index closed near 99.67 last week, edging up just 0.04% for the week. Unexpectedly weak US retail sales data for July further cooled market expectations for Federal Reserve rate hikes.

However, currency appreciation has always been a double-edged sword. Import costs do decline, but for exporters and cross-border e-commerce sellers that mainly receive payments in US dollars, the situation is less optimistic. Especially for exporters and cross-border sellers, a shift in the exchange rate from 7.2 to around 6.8 is not a small change that can be ignored.

Suppose an order eventually receives US$100,000. If the dollar-to-RMB exchange rate is 7.2 at the time of collection, the corresponding RMB income is about 720,000 yuan; if the rate becomes 6.8, the same US$100,000 can be converted into only about 680,000 yuan, a book difference of 40,000 yuan. In actual operations, sellers also face procurement, logistics, advertising, platform commissions and a series of other costs. Exchange rate changes eventually flow into the income statement through foreign exchange settlement.

As a result, exchange losses have become a frequent variable in many major sellers' performance reports this year.

Take GreatStar Industrial, a leading hand tool exporter, as an example. In its 2026 semi-annual performance forecast, the company stated that the central parity rate of the RMB against the US dollar was 6.8109 on June 30, 2026, compared with 7.1586 on June 30, 2025. The RMB appreciated about 4.9% over the year. The company's export business is mainly settled in US dollars, and the stronger local currency directly squeezed export gross margins. Exchange losses in the first half are expected to exceed 100 million yuan.

Image: screenshot of GreatStar Industrial's 2026 semi-annual performance forecast

Loctek Corporation's 2026 first-quarter report shows that first-quarter net profit fell 98.44% year-on-year, mainly dragged down by exchange losses caused by the appreciation of the RMB against the US dollar. Qian'an Technology also disclosed in its prospectus that its net profit change in the first half of 2026 was between -4.49% and 0.72%, with exchange losses from the decline in the US dollar exchange rate being the main reason.

Image source: screenshot of Loctek Corporation's 2026 first-quarter report

For small and medium-sized cross-border e-commerce sellers, the impact is often more direct. Especially in categories with relatively thin profit margins, such as apparel, home goods and 3C accessories, if product prices are denominated in US dollars over the long term while domestic procurement and operating costs are mainly paid in RMB, continued exchange rate changes may gradually eat away already limited profits.

At present, with the RMB at a three-and-a-half-year high, there is still considerable uncertainty about how much further the exchange rate can go. How to reduce exchange losses, shorten payment collection cycles, arrange foreign exchange settlement reasonably, and lock in part of profits through hedging and other tools is becoming a fundamental capability that affects the ultimate profitability of overseas business. Nowadays, selling more does not necessarily mean earning more. The exchange-rate calculation increasingly needs to be made with precision.

(Source: Cifnews Editorial Team)

Seller's Home Comment

Continued RMB appreciation is squeezing export profits, and exchange losses have become an "invisible killer" in major sellers' financial reports. Sellers are advised to incorporate exchange-rate hedging into routine operations, make good use of forward exchange locking and other tools to lock in profits, and optimize pricing mechanisms to hedge against volatility risks.

Source: Cifnews
Original link: https://www.cifnews.com/article/188291