Exchange risk management of international trade companies: An application on furniture sector

Globalization has caused many changes and developments in the field of trade as in all areas of life. Trade having been moved from the national to the international dimension and the world having become the only market brought along many risks. The fact that firms trade with countries that use different currencies has increased the importance of the exchange rate for firms. Moving the trade to an international dimension has left the companies trading with different countries to the currency risk problem caused by exchange rate volatility. As a result, the need for currency risk management has also increased due to the increase in risks caused by currency risk and the damage done to companies. Failure of companies to manage the exchange risk management process effectively and correctly may cause pecuniary loss or even loss of the company. In line with this information; In the first part of the study, the exchange rate risk and types caused by volatility in the exchange rate have been explained. In the second part of the study, information about the methods (hedging) used to hedge against the exchange rate risk is given. In the last part of the study; a survey was applied to companies operating in the furniture sector internationally by giving information about furniture sector which is a rapidly developing sector recently. With this survey, whether the companies operating in the furniture industry internationally are aware of the methods used to hedge against the exchange rate risk, whether there is a separate department to protect against the volatility in the exchange rate, whether there is a policy they follow to protect against the exchange rate volatility, and which strategies the enterprise use to protect against the exchange rate risk have been investigated.