Turkey takes measures to repatriate its exporters income

AP Photo/Mucahid Yapici
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Revenue should land up at Turkey within six months

Turkey takes measures to repatriate export income, under the pressure the Turkish lira is getting by foreign exchange markets.

According to a decree published in the Government Gazette, export companies are required to bring their sales revenue to Turkey within 180 days after the date of the transaction and to deposit at least 80% to a domestic bank.

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The measure may, in theory, enhance the liquidity of the banking sector by ensuring that large amounts of money are transferred to Turkish institutions. Immediately, repatriation strengthens the lira as well, as exporters systematically convert their capitals into national currency.

The Government Gazette was published a day after it became clear that inflation climbed to 17.9% in August, indicating that the weakening of the lira and the rising cost of imports have made life more expensive for an average citizen.

Increases of 19% and above were recorded, inter alia, in food and transport.

The Central Bank hastened to reassure the markets, arguing that it would raise its key rate at the September meeting.