Turkey promotes its currency with trade partners

The government is currently preparing to start negotiations with Chinese officials to launch trade in TL with China, after doing so with Russia and Iran. Should the two parties reach agreement, the Chinese yuan will be used along with the TL in trade with China. The Foreign Trade Undersecretariat (DTM) has already conveyed this suggestion to the Chinese government and is expecting a response shortly. Turkey exports mainly metals, motor vehicles, leather and silk products to China while importing textiles and electronic goods from the country. Underlining that the TL has become a reliable and convertible currency in global markets, having gained value over the past few years, officials from the DTM told Today's Zaman that China has a stable economy and that their currency is "strong" against others in global markets. DTM officials said Turkey would not be the first country to conduct trade in its local currency with China. "There are other countries already using their local currency with China," they noted, adding that such a system aims to protect countries in a region from currency fluctuations.

DTM officials said Turkey's exports to China have increased 60 percent in the last 18 months, reaching $1.5 billion. "Once the historic Silk Road route, one of the world's oldest trade corridors between East and West, is revived, and rail operations commence, establishing a trade route between the Far East and Europe via Turkey, trade with China will become more significant, and usage of the lira will also gain importance," they stressed.

Turkey is currently in negotiations with Russia and Iran over use of the local currency in mutual trade. Officials have also said trade in the local currency would be initiated with Iraq in the next few years, noting, however, that Turkey had no intention of trading in TL with its other neighbors, such as Georgia and Syria, for the time being.

Foreign Trade Undersecretary Tuncer Kayalar said confidence in the TL has increased over the past few years thanks to continuous growth in the Turkish economy and inflation falling to single digits. He said they expected the trend of increasing confidence in the TL to continue, noting that it is now time to use the TL in foreign trade. He said the government would shortly reach an agreement with Russia. He explained that Turkey attached importance to increasing foreign trade within the scope of a strategy for developing trade and economic relations with its neighbors and other nearby countries introduced in 2000.

Foreign Trade Minister Kürşad Tüzmen said on Jan. 11 that they were working to enable Turkish exporters to use the local currencies of neighboring countries instead of the US dollar when engaging in foreign trade, adding that the government had studied the implementation of similar applications in other countries. Tüzmen stated that Turkish exporters trading with Russia recently demanded use of the Russian ruble in their trade. "We are evaluating such requests," he said. Some Iranian exporters had also recently suggested using the TL in their trade with Turkey. Last week representatives from trade unions expressed their belief that using the TL lira in foreign trade would boost Turkey's exports.

Trade volume with Russia, China hits $55 billion

Turkey, which has broken new export records every year for the past six years, has increased its exports to Russia and China. According to data released by the Turkish Statistics Institute (TurkStat), Turkish exports reached $132 billion by end of 2008 while imports amounted to $201.8 billion in the same period, resulting in a foreign trade deficit of $70 billion. Trade with Russia and China alone amounted to $55 billion. Turkey's exports to Russia totaled $6.48 billion in 2008 while imports from this country reached $31.3 billion, with natural gas being a dominant factor. Likewise, imports from China exceeded Turkey's exports to the country in 2008; Turkish exports to China amounted to $1.43 billion, whereas imports from China were $15.6 billion.