Turkish companies have reduced their direct exposure to foreign exchange (FX) risks in the past few years, according to the international credit rating agency Fitch Ratings.
Although the use of foreign-currency borrowing remains widespread among them, they have a strong record of coping with rapid currency depreciation and many have taken steps in recent years to reduce their exposure to further depreciation in TRY, the statement read.
The global rating agency said steps included a reduction in overall reliance on hard-currency debt, higher cash holdings, and a greater proportion of cash being held in hard currencies.
“Turkish corporates are often more dependent on short-term funding than international peers and frequently only have access to uncommitted bank lines. This can leave them exposed to the risk of funding interruptions and market closures,” Fitch Ratings said.
It also noted that hard currencies account for 70% of debt on average, but only 46% of revenue, among 11 major firms that were examined by the agency.