Retailers struggle in Turkey amid country’s credit downgrade

Global Business

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Since the failed coup attempt last July in Turkey, the country has been grappling with instability. Many residents are frightened and uncertain as they struggle to deal with the threat of terrorist attacks. It’s all having an impact on the country’s economy and the business world.

CGTN’s Michal Bardavid reports.
Follow Michal Bardavid on Twitter @michal_bardavid

Retailers struggle in Turkey amid country's credit downgrade

Retailers struggle in Turkey amid country's credit downgrade

Since the failed coup attempt last July in Turkey, the country has been grappling with instability. Many residents are frightened and uncertain as they struggle to deal with the threat of terrorist attacks. It’s all having an impact on the country’s economy and the business world. CGTN’s Michal Bardavid reports.
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The Turkish lira started 2017 by hitting a record low. It has fallen some 8 percent since the beginning of the year and lost a quarter of its value since last July. Last week, the Turkish Central Bank made an effort to support the lira by hiking its overnight lending rate by 75 basis points.

The weakening currency is hurting business owners especially retailers.

Shopping malls are an important part of the retail industry in Turkey In 25 years, the number of shopping malls in the country has risen from just a few to more than 350. In Istanbul alone, there are more than a hundred shopping malls.

To cope with the currency issue, stores and landlords are cooperating and taking action to support the industry.

“Normally in all our shopping centers, the rents are applied in foreign currency, so when the rents are in foreign currencies, that’s creating a difficulty. But the industry is creating a balance in itself, so either fixing the rate, lower than the official rates, or applying some temporary measures to ease them up in terms of their rental payments,” Avi Alkas, a real estate investment manager, said.

Rent is not the only issue, many stores import goods using foreign currency transactions which are sensitive to fluctuations in the exchange rate.


Saruhan Hatipoglu discusses Turkey’s economy

To discuss the recent Turkish credit downgrading and Turkey’s economy, CGTN’s Rachelle Akuffo spoke with Saruhan Hatipgolu, CEO of BERI and global economics analyst.