Turkey’s central bank governor dismissed criticism of recent loan regulations from a second business group on Tuesday, arguing the measures create favourable financial conditions for exporters.
Companies have been complaining about Turkish authorities’ steps to limit loans to firms unless they are net exporters — part of an economic plan to try to flip the country’s big current account deficit to a surplus.
Tuesday’s meeting with the Union of Chambers and Commodity Exchanges of Turkey (TOBB) was the second time Governor Sahap Kavcioglu has been forced to defend the measures in less than a week.
Kavcioglu clashed with members of the Istanbul Chamber of Industry (ISO) on Friday. Last week Reuters reported that Ankara was intent on continuing with the policies despite companies’ complaints about accessing affordable finance.
Rifat Hisarciklioglu, head of TOBB, called on banks to extend affordable loans, saying interest rates were rising and loans were being limited.
“Commercial loans at some banks have an interest rate of 30-50 per cent, while the policy rate is at 14 per cent and deposit rates are 20 per cent. Some don’t issue loans at all,” he said.
He said authorities needed to be “sensitive” to the “side effects” of the measures and consider the rising needs for capital due to high inflation and rising input costs.
Speaking after Hisarciklioglu, Kavcioglu again dismissed criticism and advocated targeted loans.
“What all of us need to do is to ensure these (re-discount) loans are targeted and reach the healthiest and the right firms. This is our effort. We have partially succeeded in this,” he said.
The rest of the meeting was closed to press but two participants said the Q&A session between Kavcioglu and TOBB was tense. They also said the data shared by Kavcioglu regarding the use of loans was from the first half of the year, while problems began in the second half.
“They should not overlook our concerns regarding access to financing,” one said.
During last week’s meeting at ISO, Kavcioglu also accused companies of using loans to purchase foreign currencies and stockpiling.