Meltdown of Turkish lira prompts some companies to halt sales

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A number of companies including Apple have stopped selling their products in Turkey in response to the plunge of the lira to a record low of 13.49 to the US dollar on Tuesday, Turkish media outlets reported.

The beleaguered Turkish lira lost 15 percent against the US dollar after President Recep Tayyip Erdoğan defended recent sharp cuts in interest rates by the central bank, vowing to succeed in his “economic war of independence.”

Unable to properly set prices for their products in the heavily fluctuating economic environment, many fertilizer and agricultural pesticide producers stopped selling their products on Wednesday, citing rises in input prices.

İrfan Donat from Bloomberg HT reported that fertilizer and agricultural pesticide companies have started to send notices to their dealers around the country informing them that they have temporarily halted sales.

The managers of some of the companies stated on condition of anonymity that the lira’s depreciation against the US dollar has resulted in an increase in the price of raw materials.

“We are no longer able to set prices for our products. We face difficulties in replacing sold products with new ones. We have problems accessing raw materials,” they said.

US tech giant Apple was also among the companies that temporarily halted the sale of their products in Turkey due to the record fall in the value of the lira. 

Internet users trying to buy iPhones, Apple computers, iPads, Apple Watches, AirPods or accessories for these products from Apple’s official store in Turkey saw a message saying “Currently not available.”

While no official statement has been made by the company, it was suggested that Apple was preparing to update the price of its products in the wake of the Turkish lira’s historic meltdown.

Turkey’s leading coffee brand, Kurukahveci Mehmet Efendi, also announced that it had temporarily stopped accepting orders.

“Our orders have been halted until a date to be announced,” said Ezgi Bandak, the company’s manager in charge of the İstanbul region, in a statement.

The lira’s meltdown coincides with Black Friday sales and the start of New Year discounts, stoking fears that some consumer goods would not be available or face big price hikes, Reuters reported.

“It is the worst time to spend money, but there won’t be a better time. Prices may look expensive now, but they are cheaper than what they’re going to be next week,” Caner, a graphic designer in Istanbul in the market for an electric scooter, told Reuters.

The ruling Justice and Development Party (AKP) blames the weakening lira on “foreign powers launching an economic attack on the country.”

Under pressure from Erdoğan, the central bank cut its policy rate last Thursday by 100 basis points to 15 percent, well below inflation of nearly 20 percent, and signaled further easing.

In power for 19 years, Erdoğan peppers his daily speeches with imagery of the country “rebounding” and growing into “one of the largest economies in the world.”

However, Erdoğan’s AKP is sliding in opinion polls ahead of elections scheduled for no later than mid-2023, reflecting the sharply higher cost of living.

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