By Mark Bentley
May 17 2018
Turkey’s firms now owe one trillion liras in long-term foreign currency loans after the lira slumped to fresh record lows against the dollar this week.
The cost of the debt for Turkish firms is surging alarmingly as the lira slides at break-neck speed.
Companies’ foreign borrowing totaled $226.8 billion in March, or about 30 percent of GDP, the central bank said on Thursday, an increase of $5.5 billion compared with three months earlier. The loans equated to a 10-figure sum in liras for the first time.
Turkish corporates had owed about $190 billion in 2016, prompting ratings companies and analysts to issue stern warnings about their exposure to foreign currency risk.
But the lira traded at about 3 per dollar two years ago, meaning the loans cost a “mere” 570 billion liras in local currency terms. Turkish corporates had owed about 7 billion liras in 2002, when the current government came to power.
Read more at https://ahvalnews.com/turkey-economy/foreign-debt-1-trillion-liras-underscores-turkish-corporate-woes
