Exchange rate risk management in foreign trade firms and case in Gaziantep industrial firms

ABSTRACT(;&+$1*(5$7(5ø6.0$1$*(0(17ø1)25(ø*175$'()ø506$1'&$6(ø1*$=ø$17(3ø1'8675ø$/)ø506(5%$ö&,%XUFXM. A. Thesis, Department of Business Administration6XSHUYLVRU$VVLVW3URI'U0HKPHW&ø9$1September 2005, 164 PagesForeign trade in general meaning requires good?s or service?s translation between countriesand the sum of export and import. Foreign trade, especially export increases with balancingexchange rate movements. Exchange rate?s imbalanced appreciates and depreciates arisesexchange rate risk. Exchange rate risk is defined as an affirmative or adverse change of localcurrency values to foreign currency with various factors such as politics, balance of paymentsdeficits. Exchange rate risk separates into three groups like transaction risk, translation(account risk) risk, and economic risk. Exchange rate risk management especially occurs inforeign trade firms are all of the operation to minimize or absolutely destruct exchange raterisks, consist in firms. In exchange rate risk management there are used internal and externalhedging techniques to hedge from this risk. The aims of this thesis are to find out the effectsof exchange rate risks to firms and to expose techniques to minimize this risk and the way toput into practicH WKHP øQ DGGLWLRQ IRU WKHVH DLPV D TXHVWLRQQDLUH VWXG\ ZDV GRQH ZLWK WKHfirms in Organized Industrial Zones in Gaziantep. This questionnaire study based on 100firms selected randomly from 508 firms in Gaziantep Organized Industrial Zone. With theresults of this questionnaire there are made sum up the situation and determined firmsbehaviors and perception to exchange rate risk and solution manual was proposed how tomake for exchange rate risk.Key words: Foreign trade, Exchange rate risk, Hedging, Derivative instruments