As inflationary pressures persist and central banks tighten monetary policy, corporate treasurers face significant challenges in managing liquidity, mitigating foreign‑exchange risks and preserving capital reserves. Inflation erodes purchasing power, lifts borrowing costs and complicates forecasting. To navigate this environment, finance leaders must adopt practical, data‑driven treasury practices that safeguard stability and keep cash working efficiently. In this environment, The Street Finance can provide corporates with independent guidance as they adapt their playbooks.
Liquidity management: sharpening the cash lens
Tighter money conditions amplify the penalty for liquidity missteps. Treasury teams are therefore extending their cash‑flow horizons beyond the traditional 90‑day view and layering scenario‑based forecasting on top of their standard direct models. Monte‑Carlo or “what‑if” engines need not be complex: even a three‑path inflation overlay (base, +3 pp, +6 pp) can reveal funding gaps early enough to arrange back‑up lines or tweak working‑capital terms. Academic work by the Central Bank of Turkey shows that firms with robust liquidity buffers weathered the 2018–19 currency shock with ≈ 25 % smaller sales declines than peers lacking headroom.
Cost‑benefit remains central: locking too much cash in low‑yield deposits drags return on assets, yet running lean raises refinancing risk. A balanced approach typically splits idle balances between instant‑access lira accounts and short‑duration, floating‑rate notes that reset quickly. TIPS or commodity‑linked funds add a further store‑of‑value layer, though their bid‑offer spreads and mark‑to‑market swings should be weighed before allocation.
Foreign‑exchange risk: beyond the natural hedge
Given the elevated annualised volatility typical of emerging‑market currencies, relying solely on matching currency inflows and outflows can leave gaps. Many exporters now complement their natural hedge with plain‑vanilla forwards for the next quarter and FX options collars further out, capping worst‑case moves while preserving upside if the currency strengthens. World Bank research confirms that derivative penetration in Türkiye almost doubled between 2015 and 2023—a sign that boards see hedging as an operating, not speculative, tool. Choosing instrument tenor and strike requires an honest view of cash‑flow visibility.
Capital reserves: defending real value
Inflation can hurt idle funds, prompting Turkish corporates to ladder maturities across short‑term deposits and seek strategic exposure to gold‑backed ETFs or commodity ETFs that closely reflect import cost bases. Before reallocating reserves, treasurers should assess the after‑tax, after‑liquidity returns of each option to balance capital preservation with yield.
Upcoming debt maturities also deserve early action. Firms that issued five‑year bonds in 2020 at single‑digit coupons can now face refinancing at double‑digit yields. Rolling part of that exposure into shorter, amortising bank loans can smooth the impact over two fiscal years without breaching leverage covenants.
Interest‑rate strategy: keeping optionality alive
Stress‑testing liability schedules under +300 bps and +600 bps shocks quickly highlights pain points. In practice, most treasurers end up with a blend of fixed‑rate (anchor) and floating‑rate (optionality) borrowing, revisited each quarter. On the asset side, portfolio committees are inserting “guardrails” that trigger profit‑taking once gains on inflation‑linked securities exceed a preset threshold—locking in real returns before the policy tide turns. The latest WSJ CFO pulse confirms that more than half of large Turkish issuers now feed AI‑supported analytics into these decisions, cutting model‑build time by one‑third.
Inflation accounting and IAS 29: turning compliance into insight
In a high inflation environment, IAS 29 requires restatement of non‑monetary items. In practice, companies start by ingesting monthly CPI factors into their ERP. For illustrative purposes: inventory purchased for TRY 10 million in January would be re‑measured to about TRY 11 million by December if cumulative inflation hits 10 %, with the TRY 1 million recognised as a purchasing‑power loss in the income statement. Automating these adjustments not only speeds the close but surfaces margin trends in real terms—insights boards can act on faster. The Street Finance can provide strategic advisory to for better decision‑support, not just box‑ticking.
Conclusion
Turkish corporates that iterate their liquidity plans, broaden their hedge toolkit, protect reserves and embed inflation accounting discipline stand to preserve both cash and credibility. The Street Finance continues to support finance leaders on this journey—providing the independent analysis, market access and systems know‑how required to turn uncertainty into strategic advantage.
