Forward exchange markets and its development in Turkey

Abstract

ABSTRACT Forward Foreign Exchange is a very new concept in Turkish Economy and it has been used since 1984. This study is conducted in order to find out the present status of the forward exchange markets, the factors affecting the development of the market and what should be done for the development of the forward exchange markets in Turkey. For the background of this study, especially a research made by the I.M.F. staff about the forward exchange markets in developing and industrial countries, was used. In order to find answers to the questions about forward exchange markets in Turkey, two different questionnaires were prepared. The first group of questionnaires was applied'' to twenty-six banks in Turkey. The other group was applied to fifteen firms engaged with international trade. The questionnaires applied, were analysed by using some statistical tools and a statistical package called SLM. The results of the analysis done, can be outlined as follows; - Efficient working domestic money market and spot foreign exchange market are musts for the development of forward exchange markets. - Most of the firms and some of the banks are ignorant about forward exchange markets and their knowledge is not sufficient. - Still there are some regulations about the forward exchange markets which affect the development of these markets negatively. - Establishing an Interbank Forward Exchange Market will cause an increase in the number of forward exchange agreements done.