A financial product to help enterprises avoid exchange rate risks was launched on May 25 in the China-Shanghai Cooperation Organization Local Economic and Trade Cooperation Demonstration Area (SCODA) in Jiaozhou, a county-level city in Qingdao, Shandong province.

Through policy guidance, the financial product establishes an inclusive and convenient exchange rate aversion business model.

A financial product to help enterprises avoid exchange rate risks is launched on May 25 in Qingdao, Shandong province. [Photo/Qingdao Daily]

It provides "zero margin" and "zero guarantee deposit" support to micro, small, and medium-sized enterprises engaged in economic and trade activities with SCO countries and regions involved in the Belt and Road Initiative in handling long-term foreign exchange settlement and sales hedging products in the SCODA, lowering costs for local enterprises.

The product was jointly launched by the SCODA management committee, a local financial guarantee company and six commercial banks.

It makes full use of the existing exchange rate hedging tools in the financial market, allows government-funded guarantee institutions to provide performance guarantees to solve deposit problems, and recycles the guarantee quota during the credit term.

Officials and representatives from banks and financing guarantee companies attend the launch ceremony. [Photo/Qingdao News]

According to local officials, the SCODA will continue efforts to further promote financial openness and innovation. Relying on the multi-level capital market, the zone will empower foreign trade enterprises to develop, constantly improve trade facilitation, and help foreign trade enterprises better explore the markets of SCO countries and regions involved in the Belt and Road Initiative.