Abstract: This paper incorporates the market structure measured by HHI into the analysis of the effect of real exchange rate fluctuations on firm productivity rate. Using panel data for empirical analysis, we find three main conclusions. Firstly, real exchange rate appreciation has a significantly negative effect on all types of firms. Secondly, real exchange rate appreciation significantly improves the productivity of non-export firms in less-competitive industries, but it decreases the productivity of firms involved in export, the extent to which is positively related to the industry HHI and the level of export dependence.