Ok, in simple terms (just for you Mr S
), a weak TL v USD means:
A high proportion of businesses will be paying higher rents as Turkish landlords tend to use hard currencies such as USD or EUR.
Oil and gas is traded in USD which means higher prices for doğal gas, petrol, diesel and lpg. The knock on effect is that transportation costs rise - majority of retail distribution in Turkey is by road - and as transportation costs rise, so do the ultimate retail prices.
The cost of imported goods will rise.
Companies like THY, who have committed to long term deals in USD, will find themselves
having to commit... plain phucked.
All of the above contribute to price rises for the consumer - inflation last month rose to 9.54%, against an average of 7.45% last year. The Central Bank forecast that the inflation rate at the end of 2014 will be 7.6%. Good luck with that.
JF