Turkey has announced exemptions to its ban on using foreign currencies in business agreements, including export-related contracts, capital market instruments and employment contracts involving foreigners, the Official Gazette said.
The government last month said property sales, leasing transactions and rent contracts must be conducted in the Turkish lira, halting the use of foreign currencies for such deals to support the local currency, which has lost 38 percent of its value this year.
The currency has been hit concern over Turkish President Recep Tayyip Erdogan’s influence over monetary policy and a diplomatic spat with the US.
Photo: AP
The lira traded at 6.18 against the US dollar yesterday afternoon, easing from a close of 6.1205 on Friday.
The Official Gazette on Saturday said that the exemptions would also cover areas such as sales of software produced abroad, ship leasing contracts and contracts involving state institutions, if they are not related to property or employment.
If there is failure to renegotiate a contract currently in foreign currency, it would be converted to lira at the official exchange rate on Jan. 2 and raised in line with consumer price inflation rates.
The lira stood at 3.8 against the US dollar at the start of the year, but has since slumped to 6.18. The currency was at 4.5 against the euro at the start of the year and is now at 7.08.
Meanwhile, Turkish Minister of Finance and Treasury Berat Albayrak said there would be no compromise in budget discipline in his program to combat surging inflation due to be announced next week, the state-run Anadolu news agency reported on Sunday.
Earlier last week, data showed Turkey’s inflation last month soared to a 15-year high of nearly 25 percent, with prices jumping 6.3 percent from a month earlier.
Albayrak said he would announce a program as part of the government’s “full-fledged” battle against rising consumer prices.
“There is no compromise in budget discipline, the rebalancing period in the economy has started. A strong program to combat inflation will be announced,” Albayrak was quoted as telling members of the ruling Justice and Development Party on Sunday.
In an attempt to rein in the plunging currency, the Turkish central bank last month delivered a massive 6.25 percentage point rate hike.
The currency has been underpinned by this and by hopes that ties with the US might improve.
The sell-off has pushed up prices of everything from food to fuel and eroded confidence in what was once a high-flying emerging market.
DOLLAR CHALLENGE: BRICS countries’ growing share of global GDP threatens the US dollar’s dominance, which some member states seek to displace for world trade US president-elect Donald Trump on Saturday threatened 100 percent tariffs against a bloc of nine nations if they act to undermine the US dollar. His threat was directed at countries in the so-called BRICS alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest in joining. While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed
LIMITED MEASURES: The proposed restrictions on Chinese chip exports are weaker than previously considered, following lobbying by major US firms, sources said US President Joe Biden’s administration is weighing additional curbs on sales of semiconductor equipment and artificial intelligence (AI) memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions, but stop short of some stricter measures previously considered, said sources familiar with the matter. The restrictions could be unveiled as soon as next week, said the sources, who emphasized that the timing and contours of the rules have changed several times, and that nothing is final until they are published. The measures follow months of deliberations by US officials, negotiations with allies in Japan and the Netherlands, and
Foxconn Technology Group (富士康科技集團) yesterday said it expects any impact of new tariffs from US president-elect Donald Trump to hit the company less than its rivals, citing its global manufacturing footprint. Young Liu (劉揚偉), chairman of the contract manufacturer and key Apple Inc supplier, told reporters after a forum in Taipei that it saw the primary impact of any fresh tariffs falling on its clients because its business model is based on contract manufacturing. “Clients may decide to shift production locations, but looking at Foxconn’s global footprint, we are ahead. As a result, the impact on us is likely smaller compared to
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will