With the recent rapid depreciation of the euro, the exchange rate against the U.S. dollar fell below 1 to 1, foreign trade enterprises on both ends of the Asian and European continents are feeling the shock of not small. Foreign trade enterprises are the most directly affected by exchange rate changes in the market, exchange rate changes for China-Europe trade to bring more uncertainty.
According to China CCTV, the European Central Bank announced a 50 basis point interest rate hike after the monetary policy meeting on the 21st local time. And this is the first rate hike by the ECB since 2011, and in 11 years.
The tightening of monetary policy, started on 27th of August 2022. This move is mainly to curb the current high inflation in European market, the euro exchange rate will also play a supportive role. But a sharp increase in interest rates can curb high inflation in Europe, but at the same time may also stagnant economic growth. Exchange rate, boosted by the news broadcast, the weak euro exchange rate intraday jump, up more than 1% against the dollar for the day.
Despite the fact that YEPBOX's European customers can afford to pay a little bit higher prices compared to customers in other markets around the world, some orders have been cancelled due to the devaluation of the Euro. Our solution to our customers now is to offer them a more affordable product, without them having to pay for "extra good quality". In addition, I also optimize the packing solution in one container to fit more products, which also indirectly helps customers to reduce the freight cost.
In this difficult time, we are willing to work with European customers to reduce costs by all means, of course, we also take the initiative to reduce our profit margin (as long as we do not lose money), so that our offer has been more competitive!