Treasury

Spot Foreign Exchange Transactions

Foreign exchange transactions settled at the date of transaction. Spot transactions may be executed both against TRY (FX/TL) and in cross currencies (FX/FX).

Treasury Notes and State Bonds Trading

Treasury Notes are government debt securities issued by the Treasury of the Republic of Turkey in Turkish Lira or foreign currencies with a maturity of shorter than one year, while State Bonds are government debt securities issued by the Treasury of the Republic of Turkey in Turkish Lira or foreign currencies with a maturity of one year or more. Treasury Notes are sold with discount, and its return payable at the end of maturity is known beforehand. State Bonds may be with discount or coupon payments. Coupon Bonds may be issued with fixed or variable coupon interests. If you hold both of these notes until the end of maturity, payment of the principal sum and interests to you is under guarantee of the Treasury of the Republic of Turkey.

Derivative Instruments and Risk Management

Management of Foreign Currency Risks

Currency Risk

Refers to the risk of loss arising out of non-availability of foreign currencies of the same amount and current in both assets and liabilities sides of balance sheet of a business enterprise…

Forward (Future-dated foreign currency trading contract)

Means a contract signed for purchase or sale of a foreign currency of a certain amount at a previously agreed upon price at a certain date of maturity. The parties thereto are under obligation to execute the predetermined transaction at the end of maturity regardless of the then-current market exchange rates.

Currency Exchange Transactions (Swap)

Means a transaction of exchange between two different foreign currencies through two transactions, one being spot and the other at the date of maturity…

Foreign Currency Options

Transactions which empower the option buyer to buy or sell a foreign currency of a certain amount at a previously agreed upon exchange rate and maturity against a premium paid in advance. The same option holds the option seller obliged to sell or buy the same foreign currency.

Management of Interest Risks

Interest Risk

Refers to the risk of fluctuation in value of a financial asset or liability as the interest rates change in the meantime… Failure in avoidance of this risk leads to failure in exact measurement and calculation of costs arising out of debts or investments of firms.

Interest Swap Transactions

Interest Swap Transaction refers to exchange of all future interest payments for amounts and payment periods predetermined between bank and its customer.

Interest Options

Options bought by firms for a previously agreed upon and certain interest rate and cash flow against payment of a certain premium in advance in order to protect themselves against interest risk.