Lira Swings Leave Turkish Firms Wondering What Price They’ll Pay
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President Recep Tayyip Erdogan wants a cheaper lira to unleash the animal spirits of Turkish businesses. But the extreme currency swings triggered by his war on interest rates are for now having a chilling effect on companies nationwide.
“We’ve entered a tough period,” said Ayhan Zeytinoglu, head of the Kocaeli Chamber of Industry, a province just to the east of Istanbul. Raw-material suppliers to sectors including automotives and chemicals are concerned they may have to pay much more in lira terms to replace goods they sell, he said. “A competitive currency is a good plan over the long term, but not this way.”