Aksaray Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi

Öz

In economies exposed to high exchange rate risk, such as Turkey, the presence of international standards and institution-specific risk awareness are crucial for both the real and financial sectors. In Turkey, the control and management of exchange rate risk carried by banks are subject to specific regulations. One prominent practice in protecting banks against exchange rate risk is the imposition of direct limits on foreign exchange net position. This study explains regulations, limitations and the methodology related to foreign currency positions and presents the development of foreign currency positions for banking sector and bank groups based on ownership structure for the period of January 2020-September 2023 during which the COVID-19 crisis occurred and unconventional monetary policies were implemented. According to the study results, the banking sector has maintained its overall position within legal limits by balancing the short positions within the balance sheet with long positions within the off-balance sheet. The sector held long positions except during some months. Generally, long position ratios in the sector are around or below 5%. Open balance sheet positions and long off-balance positions of foreign banks and public banks have generally remained lower than those of domestic private banks. During the initial period of the pandemic crisis, public banks exhibited open positions fluctuating between 10-20%, while domestic private and foreign banks maintained surplus positions below 10%.