Turkish Industry Group Warns of Financing Crunch for Exporters

Turkish exporters face a “gangrenous” financing crunch, according to the head of a major industry chamber, in what would be a blow to the government’s attempt to develop an economy powered by sales abroad.

A restriction on lira loans to companies deemed to hold too much foreign exchange exacerbated financing issues that stem from “developments” at the central bank, Istanbul Chamber of Industry Chairman Erdal Bahcivan said in a statement.

Despite an ultra-loose monetary policy that’s resulted in the world’s deepest negative interest rates when adjusted for inflation, Turkey has also taken steps to slow credit growth and trim local demand for foreign exchange.

Some of the unorthodox measures, implemented to stabilize the lira without raising rates, are increasingly leading to spillovers to the rest of the economy.