In an interview with Al-Arabiya, the CEO of the Corum Center for Strategic Studies, Tariq Al-Rifai, considered that the policies of Turkish President Recep Tayyip Erdogan, in saving the lira, the latest of which was forcing exporters to convert a quarter of their proceeds into the national currency, that “will not succeed in maintaining the value in a way sustainable.”
Al-Rifai ruled out that the policies would succeed, “especially since many Turkish banks and companies have debts in foreign currencies, and this has a strong impact on the financial sector, and in light of the current policy, the process of transferring the risks arising from the exchange rate change to the government from individuals and companies is a negative matter.”
He pointed out that the state would bear the burden of defending the value of the lira, “in the event of the lira’s decline, the currency reserves in the Turkish Central Bank will disappear, and this policy is temporary and not sustainable.”
The Turkish Central Forced Turkish exporters to transfer at least 25% of their revenues in euros, dollars and sterling to the Turkish lira, in an attempt to curb the decline of the lira. The decision came among a number of steps taken by the government and the Central Bank in Turkey to support the lira.
Monetary authorities have said the central bank will buy 25% of total income from exports of goods as long as exporters receive payments in dollars, euros or sterling. The measure aims to bolster Turkey’s foreign exchange reserves by forcing companies to keep some of their revenue from sales abroad in local currency.
The measure aims to boost Turkey’s foreign exchange reserves by forcing companies to keep some of their revenue from sales abroad in local currency. The decision comes among a series of measures following a year of heavy losses in the Turkish lira, which lost nearly half of its value once morest the dollar last year. , coinciding with calls by Turkish President Recep Tayyip Erdogan, the central bank, to reduce the benchmark interest rate.
Regarding oil prices, Al-Rifai warned of the slowdown in the return of oil demand in China due to the restrictions of facing the pandemic and closures, while maintaining the expectation of a gradual increase in supply from major producers, and therefore he notes that demand will remain the most important in monitoring, because the second side of the equation, which is production, is easy to control or move it in the future.