Loans that can not be served by companies active in the energy sector in Turkey have reached the unbearable sum of 51 billion dollars.
The Turkish lira continues to be under pressure, as Bloomberg points out, leading a number of companies to follow the (Turkish) Central Bank’s invitation to borrow in a different currency, but the damage had been done…
Energy companies seem to be the most exposed vis-à-vis everyone else, as they have been paying for loans in the past 15 years to invest in power plants and electricity distribution networks across the country.
“The devaluation of the Turkish lira lately was indeed something unexpected, but it is not the only cause of the current situation”, said Zumrut Imamoglu, head of TÜSİAD (Turkish Industry and Business Association) to Bloomberg, “At a time when the cost is rising due to the currency crisis, companies are unable to adjust their prices accordingly because of the commitments to Turkey’s energy regulator, which in turn causes economic asphyxia.”
Turkish lira has reached historically low levels on international stock exchanges as it has traded at 4.9767 Turkish liras against the dollar, in a worrying economic and monetary policy that will be followed by the new government and the -from here on Executive- President Recep Tayyip Erdogan. It is noted that the lira in Turkey has lost 22% of its value against the dollar since the beginning of 2018, with investors worrying that the Turkish president will follow a policy of interest rate cuts against any economic logic…. / IBNA