Responding to heightened Turkish lira volatility

As a critical part of EMEA and MEA portfolios, Turkey is challenging MNCs’ 2022 strategies with its increasingly unpredictable outlook. The Turkish lira depreciated more than 70% throughout 2021, and the volatility is likely to remain in the foreseeable future. Policy unpredictability and potential political tensions in 2022 are adding to the severity of the Turkish lira volatility.

turkish lira volatility

Currently the market is paralyzed with companies finding it almost impossible to set and maintain prices, ensure supplies, predict costs within the next few weeks and predict demand flows. Turkey will be entering 2022 with approximately 40-70% inflation, a highly volatile exchange rate and depressed confidence. However, the country is a difficult one to ignore in the EMEA portfolio. Its dynamic large population with a willingness to trade up when possible and its robust industrial, construction and tourism sectors do sustain long term opportunities for MNCs.

Responding to Heightened Volatility

For 2022, companies will need to readjust their strategy to focus on financial prudence and operational resilience, employ a more agile structure, but also maintain customer loyalty. Some firms are evaluating expanding region level hires in their existing Turkey offices and exporting from Turkey to even more markets. However, in the short-term, ensuring supplies, minimizing receivables risk, rapidly adjusting prices, and retaining talent will be the critical priorities.

Turkey Volatility Hub

Take a look at our latest update, which highlights recent price hikes, product shortages and short term changes in consumers’ purchasing habits. We have also launched a new Turkey Volatility Hub, which will be updated each Monday to help executives monitor the implications of the latest lira related developments on the country’s outlook and on their business.

Fill out the form below to access an executive summary of the Turkish Lira Volatility Snapshot.

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