They invested the low-interest loan in foreign currency.

Tolga UĞUR

Opening the taps of low-interest loans during the electoral period did not generate investment or employment. Companies that received low-interest loans preferred to invest in foreign currency: according to Central Bank research, in the first 6 months of 2022, net foreign currency purchases by companies that increased their loan/sale ratio increased by 773 percent.

The Central Bank published a study titled ‘Credit Sudden Growth and Business Behavior: A Case Analysis’. It was highlighted that the research published on October 10 confirmed the findings that “excessive” and “non-selective” credit growth like last year, due to applied electoral economics, did not lead to an increase in productivity in countries in development like Turkey.

According to Central Bank research, in the first 6 months of 2022, net foreign exchange purchases by companies that increased the loan-to-sales ratio increased by 773 percent, and net foreign exchange purchases by companies that decreased it increased by 773 percent. 151 percent compared to the same period in 2021.

DISTURBED FINANCIAL STABILITY

In the investigation carried out by the Central Bank, a brief summary of what happened in the economy in the last 2 years was presented, emphasizing that the ‘excessive’ growth of loans led to deteriorations in price stability and financial stability, making it vulnerable to the economy. to external shocks.

The research stated that “SMEs that use more credit tend to increase their imports, purchases of domestic inputs, settlement of debt in foreign currency before maturity and net purchases of foreign currency, while large companies that use more credit tend to increase their purchases of foreign currency.

IT IS NOT REFLECTED IN EXPORTS

The research shows that the results show that companies that used relatively more credit increased their net foreign currency purchases by approximately 28 thousand dollars on average. “In short, companies that used more credit in the relevant period were unable to reflect this use in their sales and export results. “Instead, they appear to have increased imports, settlement of foreign currency debt before maturity and net foreign currency purchases”.

Thanks to the low interest policy implemented with the promise of bringing more investment, employment and growth, loans used by companies were turned towards financial transactions with the uncertainty created by economic policies. In other words, loans that were said to be for investments were converted into foreign currency.