The ‘noteworthy’ statement

THE BANKING REGULATION AND SUPERVISION AGENCY (BDDK) announced a decision on June 24 after markets closed that essentially ensured ‘no loans would be given to companies holding foreign currency (FX)’. Again, with this BDDK announcement, they didn’t pull a rabbit out of a hat but, rather, a nasty little rodent.

The economic management, which confessed that inflation has been accepted in order to grease the wheels of the economy, is now so helpless that its having to jam those very same wheels.

The decision made by BDDK didn’t have a real impact. However, the decision does tell us that the economic management has summoned up the courage to take all kinds of steps.

BDDK, explained the statement, made on June 24, on June 26 – in a sense. The reason they gave is significant. In brief, BDDK said the following:

-We instructed banks to prevent loans so that they won’t be misused. This didn’t happen.

-We then realized that some companies receive loans and buy FX with these loans even though they don’t need FX or even post an FX surplus.

-We couldn’t bite our tongue on this. We made this decision so that loans are used for production, employment, and investment.

BDDK determined the problem and diagnosed it as follows:

“Companies buy FX even though they don’t need it. This must be prevented.”

However, they failed to answer the following question:

“Why do companies buy FX using loans and pay interest for these loans?”

The problem is the lack of confidence in TRY. Everyone seems to think that TRY will lose against FX. We might even say they’re sure of it.

Whose fault is it that inflation and FX rate hikes have exceeded the cost of loans? Who is responsible for the fact that FX rates are increasing rapidly?

Companies aren’t banned from buying FX with the regulation in force now. Lawyers will evaluate if the ban on companies with FX using loans is legal.

To close the ‘loan’ door to companies with FX may create the desired effect: companies will have to sell FX, the FX demand at least will be broken and the decrease in FX rate will stick for some time.

But doesn’t this step send a message to society? Won’t people think the following?

-Apparently, the FX problem is increasing.

- Such a decision has been taken because they fear FX may further increase.

-There seems to be a tightness in FX, FX rates will increase, and it would be better to buy more FX.

- As companies have been directed to sell FX, will I be next?

If the people are thinking this, they are right in doing so.

What is there left to do?