Russia’s weak rouble takes impacts Turkey

Global Business

Turkey and Russia have chosen to allow economic interests to prevail over political differences. However, the effects of Western sanctions, falling energy prices, and a plummeting currency are worrying the Turkish business community. Yet, some see the Russian crises as an opportunity. CCTV’s Natalie Carney reported this story from Istanbul.

Russia's weak rouble takes impacts Turkey

Turkey and Russia have chosen to allow economic interests to prevail over political differences. However, the effects of Western sanctions, falling energy prices, and a plummeting currency are worrying the Turkish business community. Yet, some see the Russian crises as an opportunity. CCTV's Natalie Carney reported this story from Istanbul.

The drastic drop in oil prices of around 60 percent since last summer led to a decline in Russia’s rouble, and the drop in purchasing power has been a blow to Turkish-Russia trade.

“One dollar was 37 roubles but now its 72 roubles. That affects us a lot. If you buy something from here for $20, you have to sell it there for double the price. So there are no sales. We don’t have customers,” Emrah Agademir, owner of Imteks Renew Collections said.

Analysts predicted that it will be difficult for Turkey to maintain its current annual export level to Russia of $7 billion. Statistics have already shown a decline.

Turkey depends on Russia for almost 60 percent of its natural gas and energy bills make up a big part of Turkey’s account deficit. So, while lower gas prices are a blow to oil-rich Russia, if they stay where they are, economists say Turkey’s energy bill could drop by half in 2015, by at least $25 billion.

Turkey also expected to benefit from increased agriculture exports to Russia after Moscow banned imported Western foods. Yet, store owners fear little of that will trickle down to the small businesses.