Abstract:

The convergence experienced in all areas of life caused by globalization has facilitated the circulation of international capital, which also allowed companies to access foreign resources. Thus, in open economies, exchange rate risk and how to manage it have become important for businesses that realize some of their financing needs in foreign currencies. In this study, the effect of exchange rate risk on the profitability financials of the companies is examined through the foreign currency net positions in the company balance sheets. The sample of the study consists of companies included in the BIST 100 (Borsa Istanbul 100) index. The companies within the scope of the review are classified as financial, non-financial, non-exporting, exporting and all companies. The data for 39 quarters of the period 2012: Q1-2021:Q3 constitute the data set of the research. In the analyzes made, important findings were obtained between the FX net position and the profitability of the companies.

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