Turkish Ready-Wear Clothing and Fashion Federation (THGMF) President Nedim Örün, speaking to the Anatolia news agency, said they were optimistic about the ready-wear industry, which is enjoying a rapid recovery from the recession; however, he added that concerns related to deteriorating competitive power in the apparel industry due to high valuation of the Turkish lira. Örün said developments concerning a possible stand-by deal with the IMF had increased the value of TL against other currencies, thus creating a serious problem for apparel exporters.
“A deal with the IMF is necessary; we’re not opposed to it. The deal will further enhance the global trust in Turkey. However, the entry of hot money will result in the appreciation of the lira. We worry this will affect exports adversely,” he noted, adding that a different exchange rate mechanism can be introduced in a bid to prevent exports from falling. “Being paid a determined amount of bonus if the rate of exchange falls below a predetermined level might help ease exporters’ concerns,” he suggested.
Aegean Garment Exporters’ Union (EHKİB) President Jak Eskinazi said that even discussions on a possible IMF deal have influenced exports and demanded an exchange rate guarantee to protect the sector. Eskinazi said the Central Bank of Turkey should “buy up some of the foreign currency on the market while possible.” The deal with the IMF will not be signed in the short term, he predicted, pointing to the fact that the anticipated IMF deal puts pressure on the exchange rate whenever it enters the agenda.
