ASO President Ardıç: The measures taken by the CBRT against the exchange rate are not enough

Ankara Chamber of Industry (ASO) Board Chairman Seyit Ardıç spoke at the parliamentary meeting in March. “The need for working capital and the difficulties for companies to access financing are increasing,” said Ardıç.

In his speech, Ardıç said that the earthquake is expected to negatively affect growth by 1.4 percent in 2023, and that the decision of the Central Bank, wealth fund companies and the headquarters of the public bank of move to Istanbul Financial Center.

‘DIFFICULTIES ARE INCREASING TO ACCESS FINANCING’

Stating that the slowdown in domestic and foreign demand weakened economic activities, Ardıç said, “The uncertainty created by inflation causes a reluctance to invest in investments and durable goods.”

In his speech, Ardıç said that “the need for working capital and the difficulties of companies in accessing financing are increasing”, and that the abstention of private banks from market financing is a major problem.

‘CENTRAL BANK MEASURES ARE NOT ENOUGH’

Ardıç said the following regarding the Central Bank’s strategies:

“I think that the measures taken by the Central Bank against the exchange rate are not enough by themselves. We expect the Central Bank to focus on a monetary policy that prioritizes the real sector, especially in terms of continuity of production.

If you want to implement the bilateral exchange practice, which has been frequently mentioned in the economic media in recent days, it must be put into practice considering the producers and exporters”.

KAVCIOĞLU: THE USE OF COMMERCIAL LOANS INCREASED

CBRT President Şahap Kavcıoğlu also gave a speech at the ASO assembly meeting.

Noting that while the volume of loans increased on the one hand, the weight of export and investment loans in the loan composition increased on the other, Kavcıoğlu said, “The utilization of TRY trade loans showed strong development in 2022 and was approximately 5.5 times the amount of utilization in 2021.”

Other highlights of Kavcıoğlu’s speech are as follows:

* The advance loans committed to the investment, which we have provided totaling TL 150 billion, are expected to contribute more than USD 5 billion a year to the current account balance once the investments are completed .

* In 2023, we anticipate that the development process in the growth structure will strengthen with the recovery of global demand.

* We need to improve our export capacity to increase the permanent current account surplus capacity.

* The policy framework we implement has the power to reduce inflation.

* The downward trend in inflation occurs in an environment in which there are many major shocks that threaten our economy.

* To achieve the objectives, financing must support investments and the composition of credit must be developed in a way that eliminates imbalances between supply and demand in the economy.

* As of the January-March period, the use of TL business loans increased by about 1.5 times compared to the same period in 2022, while SME loans increased by more than 2 times in the same period.

* At this point, we can say that the decrease in financing costs is permanent and financial predictability increases.

* In the next period, the listing strategy, which was created with the perspective of sustainable and permanent price stability, will continue to be implemented with determination.

* We will continue to develop our targeted credit policies in ways that support export and investment capacity from the affordable financing cost opportunities offered by declining policy rates.

* With the fall in energy prices, which became evident in the last quarter of 2022, the foreign trade deficit is expected to decrease in 2023.

* The economic performance I have summarized shows that we are approaching an investment and production momentum that needs to be protected.

* After our country maintains its external balance with a permanent surplus, the supply-demand balance in the exchange markets will reach permanent stability. (Reuters)