Turkish exporters have been hindered by recent regulations causing financial strain as inflation reached a 24 year high.
Image Credit: Sergei Chirikov/Pool via REUTERS
By Reuters, Team MEB
Turkey’s exporters are experiencing serious problems in accessing financing due to new regulations by the central bank and the BDDK banking watchdog, the Istanbul Chamber of Industry (ISO) said on Tuesday.
Turkey’s economy authorities have taken restrictive steps in the face of economic turmoil that has seen inflation reach its highest level in 24 years as the lira continues to weaken after a full-blown currency crisis last year.
ISO chairman Erdal Bahcivan said exporters were having trouble accessing loans from Turkey’s Eximbank after the recent regulations, describing the situation as a “financial bottleneck.”
In a statement, Bahcivan said the chamber was witnessing “developments which stemmed from different problems, caused primarily by the central bank and that have become gangrenous with the recent BDDK regulations”, creating serious problems regarding access to financing.
“We believe that our export and industry sectors do not deserve such unpleasant surprises at all,” he said.
He added that export and production numbers could be negatively impacted in the near future if a permanent solution is not found as soon as possible.
Recent moves by the regulators include a mandate for exporters to sell 40% of their forex revenue to the central bank. It also requires exporters that use lira re-discount loans of up to 5 billion lira to sell 30% of their forex revenues to the market.
The BDDK has also restricted access to new lira loans for companies subject to independent audit if they have more 15 million lira ($908,000) of forex cash assets and they exceeded 10% of total assets or annual revenue.
The moves were part of efforts to stabilise the Turkish lira after it shed 24% this year on top of 44% in 2021 and help the central bank build up its depleted forex reserves.
The lira’s meltdown was caused by a series of rate cuts last year, which were part of President Tayyip Erdogan’s new economic programme that aims to boost exports and production.