A money changer counts Turkish lira bills at a currency exchange office in Istanbul January 24, 2014. (REUTERS/Murad Sezer)
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The lira's dive to a record low has badly exposed Turkish firms with foreign debts, forcing them to scrap some investments at a critical time as the country weathers a corruption scandal and tries to revive economic growth.The lira has lost about 16 percent against the dollar and 17 percent against the euro since Dec. 17, when the arrest of the sons of three Cabinet ministers exposed a corruption investigation which threatens Prime Minister Recep Tayyip Erdogan and his government's standing.Turkey's leading business group TUSIAD estimates that within just one month Turkish firms' foreign debt has risen 25-30 percent due to the currency weakness and higher risk premiums which push up borrowing costs.At the end of November, Turkey's private sector had $151.5 billion worth of long maturity debt, up 9 percent since the end of 2012, and $42 billion worth of short-term debt, up 35 percent.The most recent central bank data shows 57 percent of debt was in dollars and 36 percent in euros.Excluding the financial sector, foreign debt stood at $86 billion, almost two-thirds of which is held by services companies and 37 percent by industrials.
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