Turkish industry faces Chinese competition and selective monetary tightening

Rifat Hisarcıklıoğlu, President of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), has warned of intense competitive pressure on Turkish industry from Chinese manufacturing capacity, describing it as a ‘Chinese locust’ effect. Speaking at a meeting in Balıkesir, Hisarcıklıoğlu highlighted the difficulties small and medium-sized enterprises (SMEs) face in accessing finance due to high interest rates, noting that some rates have reached 60 percent.

Simultaneously, Turkey's economic management is shifting toward a policy of ‘selective tightening.’ Rather than a general interest rate reduction, the strategy aims to maintain tight monetary policy for consumers while easing restrictions for producers and exporters. This includes increasing the Investment Commitment Advance Loan (YTAK) limit to 750 billion lira and raising daily rediscount credit limits to 5 billion lira. The goal is to direct credit toward production and exports—specifically in sectors like tourism and manufacturing—while preventing general monetary expansion that could fuel inflation.