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August 14, 2018 12:00 am | FILED UNDER: business

Falling Turkish Lira Problem For Czech Business

By ČTK ocean containers stacked at port

Prague, Aug 14 (CTK) – The falling Turkish lira causes problems for Czech companies active in the country, concerning mainly those that are paid in liras, CTK learned today.

 

Since the beginning of this year, the Turkish lira has lost 42 percent to the Czech crown.

 

CEZ energy group’s subsidiaries operating in Turkey, such as Akenerji company, have difficulties repaying loans they took out in US dollars, according to CTK’s information.

 

Other foreign investors, not only in the energy sector, have similar problems, CEZ spokeswoman Alice Horakova told CTK today.

 

The drop of the Turkish currency will have a small impact on companies paid in dollars, the Czech Chamber of Commerce spokesman Miroslav Diro said.

 

Many companies with long-term transactions have hedged against currency risks, Diro added.

 

Czech exports to Turkey reached Kc53bn last year, and imports amounted to Kc36bn.

 

After Russia, Turkey is the Czech Republic’s second most important agricultural export territory outside the European Union. The Czech Republic exported agricultural products worth Kc1.24bn to Turkey last year.

 

Cattle exporters have not had problems so far, as their seasonal exports are supposed to start in August, according to the Czech Beef Breeders Association chairman Vaclav Jungwirth.

 

Since the beginning of this year, the Turkish lira has weakened by more than 40 percent to the dollar, which is mainly due to the deteriorating relationship between the two countries, and worries about Turkish President Recep Tayyip Erdogan pushing lower interest rates.

 

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