Confidence among Turkish industrialists slid to the lowest level in eight months in October after the lira fell to fresh record lows against the dollar.
Sentiment declined to 109.6 from 113.4 in September, the central bank said on Monday.
Expectations for the general business situation deteriorated to 91.7, the lowest figure since the height of the COVID-19 pandemic in May 2020, from 98.7 in September. The outlook for orders over the next three months fell to 113.3 from 128.3.
The Turkish lira has hit successive record lows against major currencies this month after the central bank cut interest rates even as consumer price inflation rose, spooking investors. The lira hit 9.85 per dollar on Monday, taking losses this year to about 24 percent. CPI accelerated to 19.58 percent last month, while increases in producer prices slowed slightly to 43.96 percent from 45.52 percent, the first drop since May last year.
The capacity utilisation rate of manufacturers also fell to 78 percent from 78.1 percent, the central bank said.
Last week, the Turkish Industry and Business Association (TÜSİAD) called for central bank independence and a revamp of economic policy. It made the comments in a 230-page report after President Recep Tayyip Erdoğan sacked three top monetary policymakers. The central bank cut rates to 16 percent from 18 percent on Thursday, sparking the latest lira sell-off.
The decline in industrial confidence stood in contrast to improvements in sentiment in the retail, services and construction industries. All three measures made gains, according to a survey published by the state-run Turkish Statistical Institute on Monday.
Confidence among retailers increased to 121.1 from 115.6. In services, sentiment improved to 120.3 from 117.8, while confidence in the construction industry increased to 92.7 from 91.8.