Turkish companies have been hit by “Erdogan”‘s trials in the economy by Alforsanius

In theory, Turkish businessman Fahid Yilmas is expected to benefit from the depreciation of the lira, as orders from abroad continue to accumulate in Turkey’s 30 billion textile and apparel industry after the fall in dollar production costs.

But as the price of textiles, textiles and other inputs has risen in US dollars, he said his wholesale clothing business is only 50-50 likely to continue in the next 12 months. Local manufacturers like Yilmas in Mertor – Istanbul’s readymade garments wholesale district – are preparing for a tumultuous spring.

Turkish President Recep Tayyip Erdogan has overseen a 50% fall in the value of the lira since the beginning of the year after the central bank repeatedly ordered it to cut interest rates, despite rising inflation.

The central bank cut interest rates on Thursday for the fourth month in a row, then fell another 7% to 16.8 Turkish lira on Friday as the currency fell one-fifth in December after losing 29% of its value in November. .

The Turkish president has argued that the cheap currency will help a country of 83 million people to enjoy prosperous exports, investment and job creation, according to Britain’s Financial Times.

Critics of the president say he is subjecting the country to a “massive economic test”.

In recent months, Erdogan has begun another cycle of relaxation, citing China’s economic transformation following the 1978 reforms.

But Ali Akimek, an economist from both China and Turkey at Japan’s Yamaguchi University, said Beijing had already devalued its currency in the 1980s and 1990s, but had implemented a clear “industrial vision.” The world’s second largest economy for decades. .

“There is no clearly defined industrial policy in Turkey,” he warned, adding, “We do not know what industry they are trying to promote.”

“It is economically insane to think that a country can create an export-oriented economy with a declining currency,” said a London-based banker with experience in both economies.

Despite growing dissatisfaction from voters and the business community, Erdogan’s determination to push for interest rate cuts has sparked speculation that some constituencies in Turkey should take advantage of the lira’s decline.

But Atila Yezilada, a researcher at the consulting firm Global Source Partners, says “this is not a policy that benefits any particular entity, including his family or associates.”

Some companies seem to be making a profit from the fall of the currency. “Most of the companies listed on the Istanbul Stock Exchange benefit from the weaker lira,” said Selim Konter, a stock analyst at Istanbul-based Ak Yatrim.

He noted that listed airlines, security groups, automakers and chemical manufacturers enjoy revenues in foreign currency value and Turkish lira-specified recruitment costs.

The success of these sectors has helped boost exports and economic growth, which is expected to cross the 9% barrier by 2021, but could fall short of inflation of 30% or more in the coming months. No harm to energy companies.Not only imported raw materials, but also ordinary Turks already suffering from high cost of living.

Moreover, many large exporters have criticized currency fluctuations, making it difficult to set prices for their products and plan for the future because what the business world needs most is stability.