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Turkish firms warned over trade with countries in crisis

ANKARA: The Turkish government has warned companies about doing business with “politically sensitive” countries, local media reported Tuesday.

In a circular sent to industrial and commercial organizations, the Economy Ministry instructed companies to coordinate any visits to such countries or business alliances with the relevant Turkish authorities, the Hurriyet Daily News reported.

The circular did not specify which countries were categorized as “politically sensitive,” but it was interpreted to be referring to the Middle East, the newspaper said.

“Bilateral visits should be declared to the ministry in advance, and they should be coordinated by the Economy Ministry, in consultation with the Foreign Ministry,” it quoted the circular as saying.

The Economy Ministry was not immediately available to verify the Hurriyet report.

Turkish businesses have been hit hard by the civil war in Syria, the surging violence in Iraq and diplomatic tensions with Egypt.

A number of Turkish companies briefly halted operations in Egypt during the violence that erupted after former Islamist President Mohammad Morsi was toppled by the military in July, although there has not yet been a major pullout, Hurriyet said.

But it said that many Turkish contractors had to drop billion-dollar projects in Libya because of the unrest there, Hurriyet said.

Turkey’s currency slumped to a record low against the U.S. dollar as a widening current-account gap fueled concerns about the country’s ability to finance it.

The deficit increased to $3.9 billion in November from $2.9 billion the previous month, according to a statement from the Central Bank.

The lira weakened 0.5 percent to 2.1906 per dollar at 11 a.m. in Istanbul, after earlier falling as much as 0.8 percent to a record low of 2.1964 to a dollar.

“This just affirms that the pace of improvement is just not moving fast enough to quickly eradicate concerns over Turkey’s key Achilles’ heel,” said Tim Ash, chief economist for emerging markets at Standard Bank Group Ltd. in London.

The current-account gap probably increased to 7.1 percent of gross domestic product by the end of 2013, from 6.1 percent a year earlier as growth gains momentum, according to government projections. The deficit widened by 28 percent to $56 billion during the first 11 months of last year from 2012. The economy grew 4.4 percent in the third quarter of last year.

The better-than-expected deficit data for November was largely due to favorable energy prices during the month, said Ipek Ozkardeskaya, a currency strategist at Swissquote Bank SA in Geneva.

“This will turn around and the gap will widen significantly starting from December,” she said.

“The lira will remain volatile and under pressure.”

Turkish exports rose to $15.5 billion in November from $15 billion a year earlier, while receipts from services increased 3.9 percent to $3.4 billion, the central bank in Ankara said.

Imports grew to $20.7 billion from $20.3 billion in the same month of 2012.

 
A version of this article appeared in the print edition of The Daily Star on January 15, 2014, on page 6.
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Summary

The Turkish government has warned companies about doing business with "politically sensitive" countries, local media reported Tuesday.

In a circular sent to industrial and commercial organizations, the Economy Ministry instructed companies to coordinate any visits to such countries or business alliances with the relevant Turkish authorities, the Hurriyet Daily News reported.

It said that many Turkish contractors had to drop billion-dollar projects in Libya because of the unrest there, Hurriyet said.

The deficit widened by 28 percent to $56 billion during the first 11 months of last year from 2012 .

Turkish exports rose to $15.5 billion in November from $15 billion a year earlier, while receipts from services increased 3.9 percent to $3.4 billion, the central bank in Ankara said.


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