The lira’s unpredictability weighed on Commercial Bank of Qatar last year, but the lender’s chief executive officer said it has no plans to exit Turkey.
The bank took a hit of about 1 billion Qatari riyals ($273 million) on its investments in Turkey, Joseph Abraham said in a Bloomberg TV interview on Thursday. “That sort of impact is very hard to stomach.”
Turkish banks have suffered capital erosion due to the lira’s depreciation, mainly caused by steep rate cuts in the face of rising inflation. The lira lost almost half of its value in 2021, making it the worst-performing major currency.
Despite the challenges, “divestment is definitely not on the cards,” Abraham said. “Managing your foreign currency risk in this environment will be the challenge” for Turkish companies, he said.
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