Page 14 - TURKRptJul22

(On June 26, it released a set of exemptions.)
It may sound complicated but @VeFinans has checked the balance
sheet of Ford Otosan (FROTO).
Froto had TRY14bn of FX deposits, TRY50bn in assets and TRY83bn in revenues recorded for the last four quarters (revenues are higher than assets, so it's the revenues that will be taken into account.) as of end-March.
The FX deposits equal 16% of revenues (higher than 10%). So, Froto needs to cut its FX deposits by TRY5-6bn if it wants to obtain lira loans.
There are two wee problems here.
First, Froto does not have its hands on dollar banknotes. Its FX is held in the FX-linked deposit scheme of the Turkish banking system and the central bank has already been consuming the hard currency dollars in the banking system at the maximum possible limit via swaps.
So, this mechanism will not mean Froto pouring fresh dollars into the interbank money market in order to clear its way to obtaining lira loans.
Secondly, Froto does not utilise lira loans. Its financial debt stood at TRY25bn at end-March, including TRY87mn of lira debt.
14 TURKEY Country Report July 2022 www.intellinews.com