Covering Foreign Exchange Risk in TRY - Turkish Lira
Foreign Exchange Risk in Turkish Lira (TRY)
When conducting transactions with Turkey, you may need to send payments or receive payments in Turkish Lira. You are then naturally exposed to foreign exchange risk. Indeed, between the moment you invoice your client in TRY and the moment you collect the TRY or conversely between the moment your supplier issues their invoice in TRY and when you settle this invoice in TRY, the EUR/TRY rate may have moved in your favor or against you. It is to eliminate or minimize this risk of EUR/TRY rate movement (assuming your accounting currency is EUR) over a determined period that you can implement hedges on the EUR/TRY. By locking in the EUR/TRY rate in advance, you gain better visibility on your future cash flows in Turkish Lira (TRY) and secure your EUR/TRY budget rate.
Foreign Exchange Risk Coverage on Turkish Lira (TRY) with Global Exchange
Global Exchange allows you to cover your foreign exchange risk on Turkish Lira (TRY). The foreign exchange risk coverage on Turkish Lira can be done through fixed forward contracts or flexible forward contracts. It is also possible to cover the exchange risk on TRY using currency options. You can use our hedging assistance tool which will help you select the most suitable hedging strategy for your needs. You can also book a consultation with our trading desk. An expert market advisor will assist you in setting up your foreign exchange hedges on Turkish Lira (TRY).
Global Exchange Answers All Your Questions on Foreign Exchange Risk Coverage for Your Turkish Lira (TRY) Operations
Are there minimum or maximum amounts for setting up hedges in Turkish Lira (TRY)?
The maximum amount of hedges in Turkish Lira (TRY) that you can validate primarily depends on the size of the forward exchange line granted to you. The line conditions granted depend on the review of your financial statements. Regarding minimum sizes, we generally do not take hedges for amounts below 10,000 EUR (or equivalent in other currencies).
What is the maximum possible maturity for hedges in Turkish Lira (TRY)?
Generally, we do not offer hedges in Turkish Lira (TRY) for maturities exceeding 24 months, but this can be considered on a case-by-case basis. Please contact our trading desk for a personalized study of your needs.
What are the setup fees for foreign exchange risk hedges in Turkish Lira (TRY)?
All fees related to setting up hedges in Turkish Lira (TRY) are included in the exchange rate communicated to you before validating your operation. The hedging is done by phone with a trading desk operator. No fees are applied to the use of your hedges.
Is a security deposit required to take a hedge in Turkish Lira (TRY)?
Again, this depends on the conditions of your forward exchange line. Thanks to its network of partners, Global Exchange generally manages to obtain forward exchange lines without an initial security deposit. Depending on your line conditions, margin calls may be triggered on your Turkish Lira (TRY) hedging contracts if the EUR/TRY rate (or any other pair on which you have validated a hedge) deteriorates beyond the variation margin or beyond your OTM. In this case, you must deposit funds as collateral to keep your Turkish Lira (TRY) contracts open. Based on your financial statements, lines without margin calls can sometimes be granted.
Are there minimum amounts for early drawdowns on flexible forward contracts in Turkish Lira (TRY)?
No minimum amount for drawdowns on your flexible forward contracts in Turkish Lira (TRY). You can draw down autonomously on the online platform as many times as you wish between the contract initiation and the maturity date of your forward contract in Turkish Lira (TRY).
What happens if at maturity of my forward contract in Turkish Lira (TRY) I have not used the entirety of my contract?
In this case, there are two possibilities. You can sell the balance of your contract by paying the potential exchange loss if the exchange rate at the time of resale is less favorable than your contract rate. Alternatively, you can ask Global Exchange to extend your Turkish Lira (TRY) contract by a few months to give you time to use it. Global Exchange and its partners reserve the right not to accept postponing the contract maturity date.
What is the current interest rate on Turkish Lira (TRY)?
The current interest rate on Turkish Lira (TRY) is 'Currency Rate'.
Are there carry points or discount points on forward contracts in Turkish Lira (TRY)?
It all depends on whether you are a buyer or seller of Turkish Lira (TRY) and against which currency you are trading the Turkish Lira. For example, against the euro: If you are a buyer of Turkish Lira (TRY) against the EUR, then there are report points because the interest rate of Turkish Lira (TRY) is supérieur to that of the EUR. Conversely, if you are a seller of Turkish Lira (TRY) against the EUR, then there are déport points.