Ercan Cercioglu is holding off on investing in new technology for the Turkish maker of car parts that he runs as the lira’s slide makes it harder for companies to service foreign-currency debt.
The cost of importing raw materials like steel jumped as the lira tumbled 13 percent in the past six months, according to Cercioglu, chief executive officer of Aydin, Turkey-based Jantsa Jant Sanayi ve Ticaret AS. The company, whose third-quarter financial debt was 41 million liras ($19 million) and was almost fully denominated in foreign currencies, is hesitating to pass additional costs onto customers, he said.
Turkey’s currency has recovered since the rate decision, while investors piling into the nation’s stocks lifted the Borsa Istanbul 100 Index up 3.4 percent yesterday, the most among 94 global benchmarks monitored by Bloomberg. Yields on Turkey’s two-year notes are down 37 basis points from a two-year high on Jan. 28, to 10.69 percent.
The central bank resisted calls to raise rates since August to support the economy. Growth in the nation of about 80 million people is set to slow to 3 percent this year from 3.9 percent in 2013, according to the median of 31 forecasts compiled by Bloomberg.