The Central Bank’s declaration in its recent Inflation Report that “TL will continue to appreciate (in real terms)”, which is dubbed as the strong TL policy, was met with concern by exporters, according to veteran Ankara correspondent (Mr) Erdal Saglam. Exporters argue that the appreciation of TL will make export growth difficult and erode competitiveness.
Journalist Erdal Saglam states that exporters have remained silent for now so as not to leave the government in a difficult situation in the run-up to 31 March local elections, but will put pressure on Erdoğan afterwards.
Journalist Erdal Saglam claimed that the Central Bank’s statement that ‘TL will continue to appreciate’ disturbed exporters. Saglam said, “Now the lobby is silent in order not to be seen to be criticizing the government in the eve of elections, but it is clear that they will talk loudly afterwards. He adds “My contacts share with me that the business community will put pressure on President Tayyip Erdoğan, who will make the decision whether to continue with Mehmet Simsek’s Economic Stabilization Program”.
10Haber columnist Erdal Saglam included the following statements in his article:
“In fact, it seems that there is serious resistance not only regarding plans to restrict credit card spending and rising rates on commercial loans, but also almost every measure that needs to be taken.
We know that exporters are disturbed by the Central Bank’s statement that ‘TL will continue to appreciate’. Now they are keeping silent so as not to put the government in a difficult situation, but it is clear that they will talk after the election. Many objections like this will make it difficult for the economic management team to make the necessary decisions.
Labor representatives, tradesmen and retail sector names have recently begun to warn the government not to go ahead with restrictions on credit card usage and consumer loan restrictions planned by the economic management team. Banks also participated in the chorus, in order to prevent the closure of this lucrative business.
As fiscal spending threatens to boost inflation to new records, the importance of curtailing credit card spending and consumer loans in suppressing domestic demand has increased significantly. Not only consumers but also shopkeepers use credit cards in input purchases to spread the cost over time. For this reason, broad segments of society are united in preventing the new regulations, rumored to be in the making.”
Background: Possible credit card restriction worries Turks mired in cost of living crisis
Credit card indebtedness in Türkiye reached a record high in 2023 and exceeded 35 billion U.S. dollars at the end of the year, increasing 2.5 times compared to 2022, according to January data from the Banking Regulation and Supervision Agency (BDDK).
Throughout 2023, Turkey suffered high inflation with an official annual rate of 64.8 percent in January and a rising cost of living for millions of households despite government measures to tame price increases.
Late last month, Alparslan Cakar, chairman of the Banks Association of Türkiye, said that restrictive measures are likely to be imposed by authorities on cards because of mounting debts that have reached alarming levels for consumers and banks alike.
Credit card sales rose 159 percent in 2023, according to Cakar.
The potential measures related to credit cards will include limits on installments and credit limit controls, local media reported last week, citing sources at the central bank that wanted to reduce demand to fight runaway inflation.
Last week, the central bank’s new chief Fatih Karahan confirmed that the bank is working on credit card regulations that will be announced soon.
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