Rapid appreciation of RMB has cast a cold spell on the shoes enterprises of Chengdu city. On February 20, the middle exchange rate of RMB against US dollar reached somewhat 7.1452 yuan. Such rise is not only affecting the exports, but also a hike in the raw materials prices can be observed.
Few of the leather shoe companies accumulated a meager profit due to RMB appreciation, which is not even enough to pay the salary and bear other expenses. These enterprises are finding it hard to cope with the present situation.
Further to add to their woes, experts inform that the exchange rate is likely to go up by another 10 percent and each manufacturers are expected to lose at least 2 yuan on one pair of shoes.
At present, there are hundreds of shoes manufacturers operating in Sichuan province, and this RMB appreciation is forcing many local shoes manufacturers to close down their units one after another.
Fibre2fashion News Desk - China
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