THE EFFECTS OF HEDGING STRATEGIES ON THE PROFITABILITY OF TURKISH FIRMS

Turkey had the most serious financial crisis in 2001. Turkish Lira had devaluation very sharply. The interest rate increased up to 4.518 % overnight at the beginning of the crisis. Many firms and even banks went into to the bankruptcy as a result of devaluation and sharp increases in interest rates. Before 2001 financial crises, firms did not have opportunity to hedge their risk on fluctuations of foreign currencies in Turkish Future Market. This paper will analyse the profitability of leading firms operating in Turkey during the last five years. This will provide comparison of profitability of the firms during the period before the future market started operation at 2005 and after 2005.