Nov 20 2017

Turkey to bar some firms from foreign borrowing - deputy PM

Deputy Prime Minister Mehmet Şimşek said Turkey is about to introduce new measures restricting firms from borrowing in foreign currency.

Şimşek made the statement in a televised interview with Kanal7 news at the weekend.

Small firms cannot borrow in foreign exchange unless they have foreign exhange income. We're closing the chapter ... Right now there's a law in parliament. Our exporters can only borrow up to three times the average export volume of the last three years. Large companies have to limit foreign exchange risk. How will they do this? if they are exporters, no problem. If not, they need to hedge themselves using financial market instruments, they need to buy insurance.

Şimşek said the momentum in economic growth was slowing due to the lira's losses, an increase in interest rates and "speculative news". Therefore, he said he expected the country to post growth of 6-7 percent this year.

He said the country needed more capital for construction of large hospitals and roads, which the government wants to build today, not tomorrow.