TRADERS AND INDUSTRIALISTS WORRIED DUE TO SUDDEN CURRENCY INCREASE

Eskişehir Chamber of Commerce (ETO) President Metin Güler expressed concerns regarding the sudden increase in exchange rates, which is rapidly raising production costs for traders and industrialists. He emphasized the necessity of balancing the currency-inflation-interest rate triad.

Güler discussed the shocking increases in foreign exchange rates, stating that the fluctuations have gone beyond mere volatility and have now become a currency shock. He stressed that immediate interventions are needed to curb the rising exchange rates.

Balance of Currency, Interest, and Inflation Needed

Following the latest decisions made by the Central Bank, the increase in exchange rates has accelerated, according to Güler. He noted that these decisions did not align with market realities, leading to harsh consequences. While low-interest rates are a significant factor in stimulating the economy, he stated that under the current circumstances of the Turkish economy, a low-interest policy is not feasible. Güler called for policies to stabilize the balance of the currency-interest-inflation triad.

Rising Cost Burden on Traders and Industrialists

He pointed out that the rapid rise in exchange rates also translates into increased costs for traders and industrialists. Small and medium-sized enterprises (SMEs) that purchase goods in foreign currency but sell in Turkish lira are experiencing growing losses. The sudden rise in currency rates is also driving up energy costs quickly. Güler indicated that the rise in rates is causing all production-related costs—such as electricity, natural gas, and transportation—to increase rapidly, further burdening businesses.

Intervention Needed for Rapid Loss of Value of TL

Güler highlighted that the rapid depreciation of the Turkish lira against foreign currencies brings about inflationary effects. He noted that the dollar, which was 7.37 TL at the beginning of the year, has now surpassed 12 TL, gaining approximately 63% against the lira. The euro has gained more than 65% against the TL, prompting Güler to stress the need for interventions in response to the rising exchange rates.

Businesspeople Concerned About Exchange Rate Increase

Emphasizing the importance of predictability in the economy, Güler pointed out that investors are cautious about unpredictable market conditions. He remarked that the current market environment is far from being predictable. The nearly 7% drop in the value of the Turkish lira in a single day is neither understandable nor acceptable. He expressed that traders and industrialists are anxious about the shock increases in exchange rates and are concerned about their ability to plan for the future. Güler concluded by stating that he hopes the Central Bank and economic management will work to change this trajectory