The calculation method of the shadow exchange rate :
Shadow exchange rate calculation formula: shadow exchange rate = foreign exchange rate × shadow exchange rate conversion factor.
Shadow exchange rate conversion factor: It is the ratio of the shadow exchange rate to the national foreign exchange rate
The value of the shadow exchange rate has an important impact on the decision-making of the project. The shadow exchange rate is analyzed and calculated based on indicators such as the price comparison of foreign trade goods, the weighted average tariff rate, the foreign trade deficit income ratio, and the export exchange cost.
E.g
Assuming that China’s shadow exchange rate conversion coefficient is 1.08, then when the US foreign exchange rate is 8.09 US dollars , the US dollar’s shadow exchange rate = US dollar’s foreign exchange rate × shadow exchange rate conversion coefficient = 8.09 × 1.08 = 8.74 yuan / US dollar.
The shadow exchange rate is the real price of foreign currency and local currency that is different from the official exchange rate in national economic evaluation. The official exchange rate is the domestic price of a unit of foreign currency set by the state. Due to the imposition of import tariffs, export subsidies and other protectionist measures, the official exchange rate does not reflect the true value of foreign currencies. The shadow exchange rate is the shadow price of a unit of foreign currency expressed in domestic currency , reflecting the real value of foreign currency, that is, the exchange rate of foreign exchange that a country’s currency can actually exchange for, or the real exchange rate – 1377 Title IX Enterprise Manager Project Management of Domestic Resource Consumption of Foreign Exchange . In the national economic analysis of the project, in order to compare the benefits and expenses, all foreign currencies need to be converted into the domestic currency. This conversion cannot use the official exchange rate but only the shadow exchange rate. The shadow exchange rate is actually the opportunity cost of foreign exchange, which refers to the loss or gain to the national economy caused by the decrease or increase of foreign exchange caused by project input or output. It can be obtained by the following formula:
In the formula: ——shadow exchange rate;
— the official exchange rate;
— the total FOB value of the first export goods expressed in foreign exchange (US dollars);
——The total landed value of the first type of imported goods expressed in foreign exchange (US dollars);
— the subsidy rate for the first export goods, which is negative if tariffs are imposed on the export goods (negative subsidy);
——The import tax rate of the first kind of goods.
The shadow exchange rate can also be obtained by adding the official exchange rate to the foreign exchange discount. Foreign exchange discount is the proportion of the actual value of foreign trade goods exceeding the value calculated at the official exchange rate, that is, the foreign exchange premium.
It can be obtained by the following formula:
Comparing the above two formulas, it can be seen that the shadow exchange rate can also be obtained by the following formula:
The shadow exchange rate is a unified economic parameter for the state to regulate the economy, and the state regularly publishes the shadow exchange rate or shadow exchange rate conversion factor.