Abdurrahman Yıldırım: Turkish Corporates Face Growing Exchange Rate Risk

Despite overall debt stability, companies are increasingly relying on foreign currency financing — exposing themselves to significant FX risk. Turkey now ranks among the top in corporate FX debt, writes Haberturk veteran financial analyst Mr Abdurrahman Yildirim.

Recent data from both the Central Bank of Turkey (CBRT) and the Istanbul Chamber of Industry’s Top 500 Industrial Enterprises report show that the Turkish real sector is not drowning in debt — at least not in aggregate terms. In fact, the latest CBRT Financial Stability Report reveals a real decline in debt burden relative to GDP.

TL-Denominated Debt Slows, Total Leverage Decreases

• In nominal terms, the real sector’s total financial liabilities rose from ₺11.94 trillion in March 2023 to ₺16.39 trillion by March 2024, a 38% increase, roughly in line with annual inflation.

• However, some of this increase reflects a maturity shift — with companies restructuring short-term loans into long-term debt.

• More importantly, the debt-to-GDP ratio dropped from 38.9% to 35.7%, signaling a real decline in leverage.

• While demand for credit remains high, elevated interest rates and tight monetary policy continue to curb borrowing activity.

• “There’s no credit supply, and rates are too high — so there’s no way for firms to increase their lira-based debt significantly,” Yıldırım notes.

External Borrowing Surges by $57 Billion in One Year

One path around domestic credit restrictions is turning to foreign lenders. This has become a major theme in corporate financing.

• According to CBRT’s Financial Liabilities of the Real Sector data, companies have increased their foreign currency loans by $57 billion in just one year.

• Total FX debt, including eurobonds, rose from $209.2 billion in March 2024 to $266.1 billion by March 2025 — a 28% increase in dollar terms.

• By contrast, domestic lira loans rose by only 22%, falling short of inflation and suggesting a real decline.

TL Lending Collapses as FX Lending Takes Over

• FX loans from domestic banks also rose sharply, from ₺3.74 trillion to ₺6.07 trillion — a 63% increase, far outpacing inflation.

• The data suggests that corporates are increasingly relying on FX debt, betting on a strong lira and trusting the CBRT’s management of exchange rates.

• As access to TL credit becomes more restricted, companies have no choice but to tap into FX sources, even at greater risk.

A recent chart published by the CBRT comparing local vs. foreign currency corporate debt across peer countries places Turkey near Hungary and Czechia, both of which also have high FX exposure.

Turkey’s Open FX Position Doubles to $154 Billion

The sharp rise in FX debt has not been matched by a corresponding increase in FX income, causing Turkey’s real sector to accumulate a massive open FX position.

• According to CBRT data, the net FX shortfall increased from $69.7 billion in Q1 2024 to $153.9 billion in Q1 2025.

• That’s an increase of $84.2 billion — or 121% in one year.

“In pursuit of financing and yield, companies have taken on enormous exchange rate risk — backed by their trust in economic management and the central bank,” Yıldırım writes.

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