logo image

Turkish market Essay

The most important risk associated with such an operation, most notably with the exchange and repatriation of funds from Turkey to the US, is the currency exchange risk.  What exactly does this type of risk refer to?  In the cases of international commercial operations, most notably in direct implementations in other countries, the operator needs to consider two or more different currencies with which the organization will need to deal with.  The relationship between these currencies is determined by the exchange rate between them.

In general, the production costs are supported in the currency of the country where the implementation was made, in this particular case, in Turkey, which means that these costs will be paid for in Turkish Liras.  On the other hand, we should also consider the fact that much of the commercial activity will take place on the Turkish market, which means that the income will also be obtained in Turkish liras. Nevertheless, the funds are needed in the US, so income in Turkish Liras will need to be transformed in US Dollars when repatriated.  This is where the problem might appear.

In this particular case, if the Turkish Lira appreciates as compared to the US Dollar, this would

Need essay sample on "Turkish market"? We will write a custom essay sample specifically for you for only $ 13.90/page

mean that less US Dollars would be obtained for a certain amount of Turkish Liras.  At the same time, the production costs will increase in relation to the dollar, because these are supported in the local, strong currency.  The risk is, as such, the local Turkish national currency will become stronger than the dollar and the relative earnings in the US currency will be lower than if the Lira was constant or if it depreciated.

Can’t wait to take that assignment burden offyour shoulders?

Let us know what it is and we will show you how it can be done!
×
Sorry, but copying text is forbidden on this website. If you need this or any other sample, please register

Already on Businessays? Login here

No, thanks. I prefer suffering on my own
Sorry, but copying text is forbidden on this website. If you need this or any other sample register now and get a free access to all papers, carefully proofread and edited by our experts.
Sign in / Sign up
No, thanks. I prefer suffering on my own
Not quite the topic you need?
We would be happy to write it
Join and witness the magic
Service Open At All Times
|
Complete Buyer Protection
|
Plagiarism-Free Writing

Emily from Businessays

Hi there, would you like to get such a paper? How about receiving a customized one? Check it out https://goo.gl/chNgQy

We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy