Almost half of Turkish exporters have no protective plan against parity risks: Poll
DHA PhotoA recent survey by the Exporters’ Assembly of Turkey (TİM) has shown that almost half of Turkish exporters do not have any plan to protect themselves against parity risks.
TİM President Mehmet Büyükekşi said 41 percent of exporters do not have any measures against parity risks and the sector is not in a good position regarding hedging, speaking in a joint meeting with Borsa Istanbul on March 14.
“The required measures need to be taken immediately to prevent such losses. Turkey lost around 12.6 billion Turkish Liras in export income due to the parity effect last year. The hedging of parity risks is of great importance for us,” Büyükekşi said, stressing that there are three ways to thwart vulnerabilities against foreign exchange risks.
“One way is to launch an insurance package through banks, but this is a costly transaction. Another way is to make forex transactions, but most such transactions are open to speculative moves. A third way is to trade in the Derivatives Exchange of Turkey,” he said.
Borsa Istanbul CEO Tuncay Dinç said there are around 2.7 million small and medium-sized enterprises (SMEs) in Turkey, which are together under a total burden of around 391 million liras in debt.
Dinç noted that debt levels have been increasing and this has negatively affected the growth rates of SMEs.
“In this vein, we give key attention to public offerings. If companies want to grow in healthier manner, they need to become more institutionalized and more professional. If your company becomes publicly traded, you start to be monitored by third eyes and to take sensible consultations, which is good,” he said.
Dinç also noted that derivatives markets are useful for managing parity risks.