Managing foreign exchange risk in foreign trade firms

In terms of enterprises focused on foreign trade operations, there are many different critical elements that should be considered. Regarding both import and export operations, one of the most common and most serious problems of the companies is the management of exchange rate risk. In order to manage the commercial potential, they have, foreign trade firms must observe the problems experienced by the foreign currencies in the circulation process and their effects on the profit-loss balance. Small-scale financial change, especially changes in exchange rates, can drive companies' commercial operations to major problems. In this thesis, the practices of foreign trade firms against exchange rate risk are examined and evaluated. In terms of this review and evaluation, the activities of foreign trade companies regarding the protection from exchange rate risk are presented with a sample application. In the first part of the thesis, exchange rates and currency risk analysis concepts are given. In the second section, there are some evaluations on the ways in which foreign exchange risk protection efforts are formed. In the third chapter, the focus is on the concept of currency risk in foreign trade. In the last part of the study, the issue of how to manage the foreign exchange risk with the use of derivative instruments in the case of foreign trade firms facing foreign exchange risk is examined with the data of DESA Deri Sanayi ve Ticaret Anonim Şirketi.