We are all witnessing the pressure on Turkey and our currency in the international markets. Both financially and politically Turkey is facing difficult times for the last couple of weeks. Especially the hit on Turkish lira on 8th of August caused a huge volatility on Turkish Lira resulting almost a 30% fall out.
Regarding to the large corporate debt payments for the incoming months of Turkish private sector, the hit on Turkish Lira suffers the firms for making new investments. Therefore, our Banking Regulation and Supervision Agency relieved the sudden pressure on lira with putting restrictions on dollar-lira swaps actions to make it harder to bet against Turkish Lira.
Within the following week, as the administrative board of TİM, we also decided to allocate our reserve funds to Turkish Eximbank for the use of exporters not to face the risk of being in a hard situation regarding to the volatility in Turkish Lira. Moreover, Ministry of Finance announced that Turkish Banks will continue to provide commercial credits to the companies who suffer the speculative boost of US dollars against Lira. Also Ministry of Technology and Industry announced, they will continue to support the investments on R&D and Design projects of SME's. As an addition, they will also support the investments which directly related to exports. These policy actions relieved the market and lowered USD from its peak level.
This kind of speculative attacks supposed to depreciate the value of Lira and create and unstable environment in the market to freeze the business operations. If we stop making new investments or shrink our production, our economy will suffer a worse recession. Therefore the measures taken by our ministries and other public institutions, resulted positively with stabilizing Dollar – Lira parity on 6 Liras average. It is important protect stability of our local currency to continue our trade relations while to continue with new investments on value added products.
In every platform, I underline that the only way out of middle-income trap, is increasing our export value. Turkey's financial structure and banking sector is far better than many countries in the world. However we need to produce value added products to increase our value per unit and to lower our trade deficit. Our capacity utilization has reached %79 on average in 2017. This means it is too hard for us to step forward in international trade with the same old production strategy. Therefore we need to transform our production on value added products. As TIM we will continue to support the projects on R&D, design, education and branding.