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It’s essential to convert CAD to CNY at the real exchange rate to maximize profit opportunities when paying suppliers in China. Find out the best way to settle your international invoices.
Historically, Canadian businesses wishing to make payments to Chinese suppliers had to do so in USD. However, the Renminbi (Chinese yuan) has become a globally accepted currency after China made some efforts to internationalize it¹.
If your supplier would rather be paid in Renminbi, there are several advantages to doing so. For example, your supplier doesn’t have to deal with currency fluctuation risks and conversion losses.
They also don’t have to wait to convert CAD to CNY, so the settlement cycle is shorter.
When your supplier bears the burden of changing CAD to CNY, they may add an exchange rate buffer within their price, which impacts your profit margin.
Hence, this article discusses the best way to convert CAD to CNY and pay Chinese suppliers in their local currency.
The Renminbi (Chinese Yuan) is the national currency of China. It’s important to note that CNY refers to offshore CNY traded outside mainland China while CNY is an onshore CNY currency that only circulates within Mainland China.
So, if you’re using offshore CNY as a payment currency, the exchange rate that matters is the CAD-CNY exchange rate. This exchange rate fluctuates based on factors like inflation, interest rates, and economic health.
Therefore, the exchange rate you get depends on the strength of the Canadian dollar relative to the Renminbi at the time. When the CAD is stronger, it’s worth more in Renminbi, and you get better value when you exchange it.
The best way to check the latest exchange rates is by using a rate calculator.
Before you convert Canadian dollars to the Chinese Renminbi, it’s a good idea to use the MTFX rate calculator. We only use real-time, mid-market rates with no hidden charges.
Check how much your payment is worth with this Canadian Dollar to Chinese Yuan converter and confirm you’re getting competitive exchange rates that only a specialist provider like MTFX can offer.
When looking to convert CAD to CNY, the first step is finding the right provider. Using your business bank could be an option, but banks usually offer terrible exchange rates, and the expensive fees add up quickly.
If you’re a Canadian company that has switched its payment currency from USD to CNY, you have merely transferred the currency risk from your supplier to yourself.
A look at the Canadian dollar to Chinese yuan exchange rate history shows plenty of fluctuations. Similarly, the Canadian dollar to Chinese yuan exchange rate forecast² indicates plenty of movements ahead.
Thus, making payments without an FX hedge means you could lose profits from unfavorable currency movements before the trade completes. On the other hand, a risk management tool like a forward contract helps protect against currency depreciation.
By locking in current favorable exchange rates, your business generates extra profit, especially if you use an international payments specialist that offers attractive FX costs in the first place.
Our exchange rates are 3-5% lower than banks. That means you’ll be saving $1,500 for every $30K payment to China.
In addition, when you trade in Renminbi, you’re likely to get better purchase prices than in USD. MTFX has the right tools to ensure you can trade CNY as a deliverable forward currency, meaning there’s some level of certainty when budgeting for international invoices.
Moreover, our dedicated currency specialists ensure the platform is tailored to your business needs. For example, you can make batch payments, large payments, and regular, automated payments with a fully-digital, all-in-one business solution.
Moving money to pay suppliers in Mainland China costs money, but with MTFX, you’re getting one of the best deals available. This includes:
Need to pay suppliers in China? Open a business account with MTFX today and pay less when you convert Canadian dollars to Chinese Renminbi.
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