The fast depreciation that has afflicted the Turkish lira in recent weeks does not bode well for the Turkish economy and the central bank should be more proactive in combating it when necessary, Mehmet Buyukeksi, head of the Turkish Exporters’ Association (TIM), said on January 18.

Buyukeksi dismissed analysis that suggested the depreciation would support Turkish exporters’ competitiveness. “We don’t say it’s perfect when the lira hits the 3.90s versus the dollar. Turkey’s macroeconomic balances are much more important to us”, Buyukeksi said.

The TIM head praised moves from the central bank that have amounted to an implicit rate hike and also its currency swap policies but said that a more proactive approach was still required. The competitive exchange rate level for Turkish exporters was TRY3.50 per dollar, while an excessively volatile rate resulted in higher costs, according to Buyukeksi.

The Turkish lira was trading at 3.7776 against the USD as of 18:39 Istanbul time on January 18, up 0.53% d/d.

TIM forecasts 3.1% GDP growth and 9% annual inflation for Turkey in 2017, Buyukeksi added. Turkey’s exports would reach $155bn this year, higher than the government’s $153.3bn target, the exporters' association also anticipated, he said.

Turkey’s exports rose by 0.84% y/y to $143bn last year.

A Reuters poll released on January 18 concluded that economists were anticipating finalised figures showing that the Turkish economy grew 2.3% in 2016, while overall they forecast that it would grow 2.8% in 2017. End-of-year CPI inflation was expected by the respondents to come in at 8.4% in 2017, higher than the central bank’s 6.5% target.

The Turkish government is targeting 3.2% GDP growth in 2016 and 4.4% in 2017.