Azernews.Az

Istanbul Chamber of Commerce (İTO) President Şekib Avdagiç described the Central Bank of Türkiye’s decision to cut its policy rate by 300 basis points as highly significant, adding that with three more meetings remaining this year, the business community anticipates a total reduction of around 1,000 basis points under normal conditions.

Speaking on current economic developments, Avdagiç noted that the business community has been showing remarkable patience and resilience in adapting to the stabilization program announced since 2023. Despite ongoing difficulties, he said, companies continue to produce and sustain exports.

Highlighting competitiveness issues faced in certain sectors, Avdagiç stressed the importance of controlling inflation without conditions or reservations:

“Bringing inflation down is a goal that must be supported without any ‘buts’ or caveats. When we compare the increase in foreign exchange rates with rises in the Turkish lira valuation, minimum wage adjustments, and the consumer price index (CPI) over the past two years, it is clear that the lira’s depreciation has lagged far behind. Last year alone, this created a 25% gap—meaning exporters’ revenues fell by 25 percentage points.”

On the Central Bank’s recent move, Avdagiç reiterated its importance:

“The 300 basis point cut in the policy rate is a very important and valuable step. With three more meetings left this year, we foresee a total reduction of 1,000 basis points under normal conditions. By year’s end, we hope financing costs will decline further and inflation will close below 30%.”

Turning to financing challenges, Avdagiç emphasized the need for greater access to credit. He expressed gratitude for the recent revision of the SME (small and medium-sized enterprises) definition but argued that restrictions on loans to SMEs should be reviewed.

Addressing the debate over regional differences in minimum wage, Avdagiç explained that İTO has long advocated for differentiated measures, including additional allowances for public sector employees working in Istanbul. He said the same logic applies to the minimum wage:

“It is nearly impossible to maintain employment in certain sectors in Istanbul at or near the statutory minimum wage. In practice, minimum wage is not applied in many sectors in Istanbul. According to our findings, in many workplaces, the effective minimum wage starts at about 30% above the official rate.”

On a question regarding his candidacy for İTO presidency, Avdagiç reminded that, by law, elections for Türkiye’s 367 chambers and exchanges will take place in October–November 2026, at the end of the current four-year term. He explained that İTO always conducts the necessary consultations and evaluations before deciding to run again, and announced that with the backing of the business community, he will seek re-election in the upcoming term.