In the globalized economy, small and micro enterprises (SMEs) increasingly engage in international trade, facing significant challenges from exchange-rate volatility. These fluctuations can escalate trade-financing costs, posing substantial risks to SMEs' financial stability and competitiveness. Combining theoretical analysis with case studies, this study investigates how exchange-rate movements impact the international-trade financing costs of SMEs and explores effective legal-policy strategies to mitigate these effects. The research reveals that exchange-rate fluctuations significantly increase trade-financing costs through currency-swap losses, higher credit costs, and elevated financial risks. By analyzing domestic and international financial theories and risk-management systems, the study proposes comprehensive legal regulatory measures, including domestic institutional reforms, financial-supervision regime changes, and international law cooperation mechanisms. By surveying theories of domestic and international financial markets and risk-management systems, empirical evidence shows that a robust legal framework and strong policy instruments can effectively reduce SMEs' exposure to exchange-rate risks, lower their financing costs, and enhance their global competitiveness.
Xing-Yu Pan (Tue,) studied this question.