Turkish exporters achieved a record performance last year, but face challenges due to an overvalued local currency and a cooling demand in Europe. The government's economic policies, including a requirement for exporters to convert 40% of foreign income into lira, have led to trade imbalances. Despite high inflation, companies like System Denim find it easier to pass costs to local consumers. President Erdogan aims to make Turkey a manufacturing hub, but industries are calling for a devaluation of the lira to boost competitiveness. The upcoming election adds pressure as Erdogan showcases policy successes and aims to stabilize inflation with a steady lira. Turkey's ambition to become a top 10 global exporter is still distant, with companies weighing domestic sales against foreign currency earnings.

Turkish exporters, despite achieving a record haul last year, are facing challenges due to what they consider an overvalued local currency and a government approach that stimulates selective economic sectors while controlling the Turkish lira. Firms like System Denim find it easier to pass on costs to domestic buyers than to European markets, where inflation is lower. The trade deficit has more than doubled to over $110 billion, and the real effective exchange rate of the lira increased by 18% despite nominal losses against the dollar. With elections approaching, President Erdogan is focusing on local production and a stable lira to combat high inflation. Industries are calling for a devaluation of the lira to boost competitiveness, while the finance minister seeks an optimal exchange rate. Companies are weighing the benefits of domestic sales against foreign currency earnings from exports.

Top business representatives in Turkey are urging a shift to hyperinflation accounting, warning that the current system misrepresents profitability. Companies are required to pay taxes on profits that do not exist, according to Nurettin Ozdebir, head of the Ankara Chamber of Industry, as quoted by the newspaper Dunya last Friday. Sahin Bilgic, chairman of the Adana Commodity Exchange, added that regardless of a company's earnings amidst such high inflation, it is losing capital.

Turkey's largest business leaders are calling for a transition to hyperinflation accounting, warning that the current system misrepresents profitability. They argue that companies are paying taxes on non-existent profits and that despite high inflation, capital is being lost. The Turkish accounting standards require a three-year cumulative inflation of 100% to use this system, a threshold surpassed about a year ago. However, a law adopted in January states it cannot be applied until earnings for the entire year of 2023 are realized. Consumer price inflation in Turkey rose over 85% in October, while producer prices increased by 158%. The Central Bank's rate cuts have accelerated price increases. Company net incomes on the Istanbul Stock Exchange grew by 90% in the third quarter, and bank profits increased fivefold in the first nine months compared to the previous year. Without hyperinflation accounting, what is currently seen are 'zombie companies,' according to a public accountant.

Turkey's foreign trade deficit increased nearly 300% year-on-year last month due to higher energy and commodity costs. The deficit reached $10.4 billion, up from $2.6 billion the previous September, with a record $11.2 billion in August. Turkey's economic growth strategy and reliance on energy imports have been challenged by global price increases following Russia's invasion of Ukraine. Turkish authorities are negotiating energy payment adjustments with Russia, including delayed payments and transactions in rubles. Energy imports constitute a third of Turkey's total imports, which surged to $272 billion in the first nine months of 2022. Despite a 9.2% increase in exports to $22.6 billion, imports grew by 41.5% to $33 billion, with Germany as the top export destination.

Sahap Kavcioglu, the governor of Turkey's central bank, announced that consumer inflation by the end of the year will be nearly 18 percentage points higher than the latest April forecasts, reaching 60.4%, which is about twelve times higher than the official target. It is expected to slow down to 19.2% by the end of next year and to 8.8% by 2024. Kavcioglu spoke in Ankara about rising import and food prices, as well as the impact of a weak lira, after the central bank kept interest rates unchanged for the seventh consecutive month despite annual price growth reaching 78.6% in June.

The Turkish lira has experienced its longest losing streak in 20 years, depreciating significantly after President Erdogan defended his policy of low borrowing costs, which has led to high inflation and investor frustration. Erdogan's economic approach has been widely criticized by economists, opposition parties, and analysts, with concerns that it may affect his political power and the well-being of Turkish citizens. The currency's devaluation has also impacted Turkish bonds and companies, with predictions of potential rate hikes in the future.

The Turkish lira hit a record low, trading at 12.0580 to the dollar, following President Erdogan's defense of his economic policy prioritizing lower interest rates to stimulate growth and employment. This stance marks a departure from previous policies that focused on high borrowing costs and a strong currency to control inflation.

The Turkish lira reached a new low after the central bank cut interest rates for the third consecutive month, despite consumer inflation hitting nearly 20% in October. The rate cut, influenced by President Erdogan, has led to a significant devaluation of the lira against the dollar, with a 400 basis point reduction since September. This contrasts with rate hikes in other emerging markets like South Africa and Mexico. The lira's decline has raised concerns about Turkey's economic stability, given its substantial external debt and upcoming foreign-currency debt repayments. The BIST 100 Index rose and bond yields increased following the central bank's decision.

The article discusses the murder of Mehmet Kaygisiz, a man with connections to Kurdish dissidents, in London in 1994. It reveals that Turkish spies allegedly used a shell company based in London to orchestrate an arms operation that supplied weapons to state-sponsored assassins. According to documents presented in a Turkish court, Turkish state officials channeled money through a company associated with a Clerkenwell accountant to purchase arms, including Uzi submachine guns and Jericho 9mm pistols, with a total value exceeding £10 million. The report suggests that at least one of these Israeli-made firearms was smuggled into the UK to an assassin purportedly tasked with killing Kaygisiz due to his ties to Kurdish separatism.

International election observers from the OSCE have criticized the fairness of the Turkish referendum, in which President Recep Tayyip Erdoğan claimed victory to gain extensive new powers. The OSCE reported that the referendum was conducted on an 'unlevel playing field' and criticized last-minute changes to voting rules by Turkey's election committee as illegal. Despite the lack of authority to enforce sanctions or demand a re-run, the OSCE's findings support the Turkish opposition's call to nullify the results due to alleged irregularities. President Erdoğan has rejected the OSCE's criticisms and intends to proceed with constitutional changes, asserting that Turkey's elections were the most democratic compared to Western countries.

The article discusses the potential impact of the upcoming constitutional referendum in Turkey, which could solidify President Recep Tayyip Erdoğan's power, marking the pinnacle of his rise from a modest background to the most powerful man in Turkey. Erdoğan's past is illustrated through references to his childhood selling sesame bread in Istanbul, his connection to a village where he spent summers, and his time in prison for reading an Islamist poem. The referendum, which polls suggest he may narrowly win, could significantly alter Turkey's political landscape and entrench Erdoğan's authority.