Turkey to take measures to limit companies’ forex debt: Şimşek
“We will limit forex debt [for big companies] as we did for small and medium sized enterprises. Big firms say they can manage their debts but we see that they actually cannot,” Şimşek said in his opening speech at the 7th Uludağ Economy Summit in the northwestern province of Bursa.
He cited inflation rates persistently in double-digits and the depreciation of the Turkish Lira, exacerbating heavy debts in foreign currencies, as the Turkish economy’s main problem, vowing to “take the necessary measures.”
“We want investors who may have invested in the construction sector up to now to invest in R&D and technology. They should invest the money they have earned through construction in manufacturing,” Şimşek said.
He also called on banks to set up investment banks to support startups instead of relying on deposits.
Turkish Lira hits record low
Meanwhile, the Turkish Lira plunged to a record low as rising global trade tensions triggered a bout of investor jitters in the early hours of March 23.
Against the U.S. dollar, the lira fell to a record low of 4.0375 at one point according to Reuters. Bloomberg put the record point at 4.0361. After paring some of its losses, the lira floated around the 3.9700 line.
The lira also hit a new record low of 4.9778 against the euro.
The yen rose amid talk of position unwinding by Japanese retail investors, who had held long positions in higher-yielding currencies, such as the lira, against the Japanese currency.
“It’s mainly driven by cross/yen selling and stops from retail [investors] from what we can see,” said Tarek Horchani, head of sales trading in Asia-Pacific for Saxo Markets in Singapore.
The broad rise in the yen came as financial markets were rattled by worries over rising U.S.-China trade tensions.
The yen is often viewed as a safe haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan’s current account surplus.