TİM President: 2 percent support for conversion to TL, not directly to exporter

Mustafa Gültepe, Chairman of the Turkish Exporters Assembly (TIM), stated that the latest regulation to give companies 2 percent conversion support on the sale of foreign earned currency to the Central Bank is not support. direct for exporters and appeals to a narrow segment, and as exporters demand exchange rates proportional to the increase in inflation, they say to protect it.

Gültepe affirmed that the latest reductions in energy prices will prevent new increases even if the prices of products in the domestic market do not drop; however, he said that it is not enough to increase competitiveness in export markets.

Responding to questions from members of the press after the meeting where the ‘Strategy and Sustainability Action Plan for the Garment Sector’ was announced, Gültepe stated that the latest Central Bank regulation regarding support for the conversion of TL is not direct support given to exporters and said: “It may not cover those who export with 70-80 percent imports. (Commitment Requirement) reduces the scope. There is no direct support to the exporter. The goal here is to make TL a bit more useful,” he said.

THE ORDER HAS ARRIVED

According to the relevant statement published in the Official Gazette last week, a foreign currency conversion support of 2 percent of the amount converted to TL will be provided, in exchange for a commitment not to purchase foreign currency for a period determined by the CBRT, during the sale of foreign currency to the CBRT.

In his assessment last week, the president of the Steel Exporters Association, Adnan Aslan, said that sectors that are highly dependent on imports of raw materials, especially steel, have to have foreign exchange on their hands to supply of raw materials, and said that many sectors and companies cannot benefit from this support due to their commitment not to receive foreign currency.

By claiming that the increase in the exchange rate is below the rate of inflation, exporters reduce the exporter’s competitiveness and create the risk of market loss, arguing that the increase in the exchange rate should be directly proportional to the increase in inflation.

CONTINUES DEMAND FOR EXCHANGE LEVEL PROPORTIONAL TO INFLATION

Gültepe responded to the question “Always” to the question “After the latest CBRT regulations, do you still maintain your position of ‘the level of the exchange rate directly proportional to the increase in inflation’ as exporters?

Gultepe continued:

“The latest regulation has nothing to do with it. This is not a direct contribution to the exporter or producer. It is a resource that he has fully put in to attract foreign resources to Turkey.”

WILL THE ENERGY DISCOUNT REFLECT THE PRICES?

Gültepe, who also evaluated the latest energy discounts, gave the following response to questions about whether the discounts will be reflected in product prices:

“At the moment, especially in some sectors, there is a certain difficulty in the competition, so the discount will be a great support, at least in order to keep up-to-date. Otherwise, there is no situation that leads our competitiveness to different points. It has been a moral motivation for us so that it does not get worse. There was a 30% power reduction in four months. We think there may be potential to keep prices at the same point or to discount. At least, I think we won’t see a price increase.”

While the Energy Market and Regulatory Authority (EMRA) reduced the maximum price in the free electricity market; This discount will bring a 12 percent decrease in the electricity bills of industrial establishments that purchase electricity on the free market in February.

BOTAŞ announced in February that it will reduce the price of gas sold to large industrial establishments by 13.3 percent to 17.22 percent, and the price of gas used for electricity generation by 16.67 percent. (Reuters)