There are more important details than exchange rate rise….

…And the Dollar exceeds 4.00 TL level, which was waiting around the corner anyway. Following Moody’s decision to downgrade Turkey’s credit rating on the grounds of its “external fragility”, Fed had raised rates, LIBOR rates had climbed up, all leading to many diplomatic issues.

Accordingly, increases in neither USD/TRY nor currency basket should surprise us. It’s only natural that even benchmark rate currently stands at 14,30%. Rises in exchange rates or and interest rates are the “new normal” now.

It looks like the “high growth-high inflation-high interest rate” trio will be the next new normal. This new trend will swell the balance sheets, increase revenues while we will be witnessing businesses grow 15-25% more than expected with the rapid digital transformation.

“Heads up…”

It’s a trap, because, this sudden growth unfortunately induces us to get into a meaningless competition with our rivals, thus making us forget the fact that we should focus on providing value creation. The way I see it, so many businesses are ready to give up high profitability, knowingly or unknowingly, in order to get one tiny step ahead of their competitors.

Following such rapid growth, most businesses go through tough times because of the huge amount of energy they spend to leave competitors behind. Over-employment, uncalculated risk and excessive costs… Such problems stick out like a sore thumb in recession times.

I also need to remind the companies burdened with loans of the fact that they should act wisely and avoid massive discount strategies to get ahead of competitors. If they do this, they will suffer from a lack of profitability, and eventually poor growth.