Abstract: This study was designed to investigate Islamic hedging tools in participation (Islamic) banks to mitigate exchange rate risk in Turkey during 2017. This study uses a qualitative approach to investigate hedging instruments in participation (Islamic) banks against exchange rate risk. Data were collected using questionnaires from the senior management of 5 Islamic banks which covers all of the Islamic banks in Turkey. The finding of this study suggests that Murabahah agreements represent the most used Islamic contracts. Islamic finance contracts that produce high rank of risk (Mudarabah and Musharakah) are less implemented in participation banks than less risky contracts. This study is the first study which sheds the light on exchange rate risk and Islamic hedging tools in participation banks (Islamic banks) in Turkey.
Fatma Mansour and Hatice Dooukanly, 2019. Exchange Rate Risk in Participation (Islamic) Banks in Turkey. International Business Management, 13: 44-48.