The lira, Turkey’s currency, has depreciated significantly over the last several months as measured against the dollar, a trend that Fortune says has hurt retailers selling imported items and, in some cases, struggling to pay rent.
The lira has lost roughly a quarter of its value in the last six months.
The trouble is not all one-sided, notes Fortune, as companies selling their own goods across the border and in Turkey have been hit, too, with the financial publication stating that Britain’s Topshop and the United States’ GNC have shuttered locations based in shopping malls. Retail space overall in Istanbul, part of the largest malls there, goes without tenants. That comes against a backdrop where malls were built in large numbers over the past few decades, to the tune of about $53 billion, specifically during the timeframe between 2003 and 2014 when Tayyip Erdogan was prime minister. Now those malls are pressured by larger economic downturns. The malls were built on the backs of loans denominated in Euros and dollars, and as the lira has fallen, debt servicing has become more expensive.
Investors are looking for an interest rate hike this week to help put a floor under the currency, which has further fallen 10 percent against the dollar to mark the beginning of 2017. In tandem with that, economic growth has turned negative, a trend not seen in seven years. Fortune noted that growth for the year that just ended is estimated to have been 3.2 percent, which would be a markedly slower pace than the high-single-digit percentage gains seen over the past several years.