Depreciating Turkish Lira affecting businesses in Cyprus

Business operators in the TRNC are fearful of survival in the wake of the ever-weakening Turkish Lira, Yeniduzen reported.

One shop owner selling white goods said that people walk in, ask the price of an item and then walk straight out.

A building contractor said that the industry had shrunk by between 35-40 percent as the cost of materials has risen.

A car salesman said that “Today’s cost of a car worth £8,000 imported from abroad is now £12,000. In fact, the account is in the middle… We have almost no vehicle sales, and we cannot replace the vehicles we sell with a new vehicle”.

A salesman in imported car spares said “There was a serious crisis created by the epidemic in auto spare parts a year ago. Now there is this currency crisis. When the two crises combined, they adversely affected the industry”.

Meanwhile, Kibris Postasi has reported that “Deutsche Bank had stated that it expects the Turkish lira to depreciate unless there is a change in monetary policy, and that the rise in the exchange rate may reveal structural vulnerabilities in the Turkish economy.

“Deutsche Bank economists stated that, considering the depreciation of the Turkish lira and the exchange rate pass-through in prices, the impact of this on headline inflation would be three percentage points in the next six months, adding that Turkey will achieve a lower growth figure next year due to supply problems and increased uncertainty in the business environment”.

Yeniduzen, Kibris Postasi, LGC News