Foreign currency ‘new balance’ statement from ITO Chairman Avdagic

Istanbul Chamber of Commerce (ITO) President Şekib Avdagiç stated that they predicted that exchange rates would return to equilibrium in a short time after a transition period and said: “The deterioration in price behavior in this transition period should be phased out quickly. It is of great importance for the manufacturer to know at what price he will replace the product he sells today, at what price tomorrow or at what exchange rate the raw material he will buy 3 months later will be procured, in order to break inflation expectations and prevent expected inflation.

Avdagic, in his speech at the July ITO parliamentary meeting with the participation of Trade Minister Ömer Bolat, said that the new economy administration has written a new history of development according to the rules of the economy by following close to global economic realities.

Expressing that the main theme of the new development story can be summed up as interest rate hikes and the search for a new equilibrium, Avdagic noted that they attach importance to the Central Bank’s announcement that it will simplify macroprudential measures.

Avdagic said: “As of the last week of June, we see that commercial lending from private banks contracted on an annual basis. With the provisions adopted, the rapid removal of barriers to private sector access to concessional finance will also pave the way for the economy to return to its level of potential growth.

Noting that Trade Minister Ömer Bolat knows the ITO community well, Avdagic continued as follows:

“Mr. Bolat is under the roof of our Chamber and our community with two important and strong ties. Minister Çavuşoğlu was a professor at our Istanbul University of Commerce and a member of the ITO Economic Advisory Board. Above all, he has a vast heritage as a man of action who does not let go of his pen. As the President of the Istanbul Chamber of Commerce, the leading institution of the Turkish business world, I would like to express that I see it as a great opportunity to walk the path with our Minister and a great opportunity to remove the obstacles in front of trade.”

CREDIT EXPLANATION

Şekib Avdagic stated that the currency tightening should not slow down the production lines, saying:

“Therefore, the level of the policy rate must be supported by a series of measures for production and trade. We demand that the decisions of the Central Bank are supported by a ‘predictable, easy to understand and coordinated set of policies’, thus paving the way for the real sector.

First of all, we would like to emphasize that a well-functioning credit mechanism is essential for production, employment and exports. A well-functioning credit mechanism is one of the basic components of economic stability. The deterioration of the credit mechanism not only affects companies in need of financing, but also disrupts the entire functioning of the market with the domino effect”.

Noting that they predict that exchange rates will stabilize in a short time after a transition period, Avdagiç said: “The deterioration in price behavior must be quickly removed in this transition period. It is of great importance for the manufacturer to know at what price he will replace the product he sells today, at what price tomorrow or at what exchange rate the raw material he will buy 3 months later will be procured, in order to break inflation expectations and prevent expected inflation.

VISA FREE AND CUSTOMS UNION

Regarding the NATO Summit held in Lithuania, ITO Chairman Avdagic said that Turkey has taken important steps to get those they are entitled to, using the cards in their hand correctly to defend their own interests.

Recalling that President Recep Tayyip Erdoğan, who made a reservation for Sweden’s NATO membership, announced the conditions for removing it, Avdagic said:

“Two of them are directly related to the business world. Updating of the Customs Union Agreement and liberalization of visas in the field of full accession to the EU. From this podium we constantly said that the Customs Union Agreement that we signed with the EU in 1995 had to be updated. Almost 30 years ago, this agreement was causing us serious problems in foreign trade. That is why we ask both our government and the EU countries to update it. Mr President, you have taken the right step in this direction.

Secondly, as you know, we are experiencing the visa problem, which has now become an obstacle to our businessmen and trade, to the bone. Therefore, we consider it very important that visa liberalization is included in the conditions that must be met. The fact that Sweden understands that it has to respect Turkey’s sensitivities and takes steps to convince us in this direction is an indicator of Turkey’s effectiveness. We see that the government is managing a very successful process in this regard, and as businessmen we appreciate that it uses the cards we have in favor of our country.” (AA)