Central bank, companies clash over Turkey’s new loan rules By Reuters August 1, 2022 Creative Commons Employment continued to grow, although marginally, as firms move to boost capacity in July, according to the survey A big Turkish business group and the central bank clashed on Friday over recent regulations covering loans, with the Istanbul Chamber of Industry’s (ISO) head saying the measures create “irredeemable” problems. Turkish authorities including the central bank and BDDK regulator have taken steps to limit loans to companies except those that are net exporters, as part of an economic plan that seeks to flip the big current account deficit to a surplus. ISO had earlier complained that the new regulations created a “bottleneck” for companies accessing financing. But this week Reuters reported, citing people familiar the plans, that Ankara will forge on with the policies. Speaking at ISO headquarters, Chairman Erdal Bahcivan repeated that the rules were hurting companies. “Eximbank turning down the tap on loans and the BDDK’s steps that bring limits to lira loans based on companies’ forex assets are impacting firms negatively,” he told the audience, which included Central Bank Governor Sahap Kavcioglu. “These are increasing problems to an irredeemable extent,” Bahcivan said. Companies expect authorities to normalise loan and financing conditions and to end or ease regulations incompatible with the reality of the real sector, he added. Adressing the same crowd after Bahcivan, Kavcioglu said the central bank’s regulations were creating favourable conditions for exporters to increase production. “We have been focused on getting the most efficient results for our country’s economy through credit policies that will support a current account surplus,” he said. Later, Kavcioglu said he does not understand why companies are complaining about problems regarding access to affordable financing. Companies had a “FX obsession”, he said, and accused some of using loans to purchase foreign currencies. “I am ready to do whatever is necessary for all firms to use these resources,” Kavcioglu said, dismissing criticism that some companies cannot access re-discount credits.
