Abstract:

Exchange rate risk for companies has increased considerably with the transition to the floating exchange rate system and the globalization of trade. The fluctuations in exchange rates create extraordinary effects on the activities of companies. The Turkish economy is an economy with a trade deficit. For this reason, companies are generally adversely affected by exchange rate movements. Firms use different financial instruments to hedge currency risk. However, the amount and how these instruments will be used depends on the determination of the effect of the exchange rate risk. In our study, ratios were determined to reveal the effect of exchange rate risk and a research was conducted on businesses operating in BIST30. In the study, panel data analysis method was applied with quarterly data between 2016 and 2021. As a result of the research, it has been seen that the exchange rate risk ratios have an effect on the market value of the firm. The effect of the firm's foreign currency position on the market value is significant and positive. It has been observed that the foreign currency liabilities of the firms have a positive effect on the market value. It has been observed that foreign currency assets affect the market value of the firm negatively.

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