Deals
Turkish Banks Sweat Under Rising Pile of Debt Restructurings
- Queue of companies seeking to renegotiate loans growing longer
- Lenders under pressure as economy shrinks, boosting bad debts
Customers use automated teller machines (ATM) on a street in Istanbul.
Photographer: Ismail Ferdous/BloombergThis article is for subscribers only.
Turkish companies are struggling to get off the hamster wheel of debt as foreign borrowings run near record highs. The reason: a plunge in the lira that has driven up the cost of their obligations in dollars and euros.
Banks are being left to carry the burden amid a surge in demand from some of the country’s industrial giants to restructure their liabilities -- on top of a jump in bad loans. Lenders are also pulling back on providing new credit as the financial system comes under increasing pressure from the recession and an inflation rate of almost 20 percent.