The Japan Bank for International Cooperation (JBIC) has signed loan agreements with two leading private commercial banks in Turkey. The loans will establish export credit lines denominated in euros for Finansbank and Denizbank. They are co-financed with Mizuho Corporate Bank and each will total up to €
The credit lines will be used for extending loans to Turkish firms when they import machinery and equipment from Japanese companies. In conjunction with the yen and US dollar-denominated credit lines established by JBIC in February, the new euro-denominated credit lines will enable the two banks to respond to demand for credit in three currencies.
JBIC’s loans will support Japanese companies looking to expand their business with Turkish partners. As Turkey seeks accession to the European Union, the business transactions of its domestic firms are increasingly euro-denominated. Japanese companies in the electrical machinery and automobile industries are being asked to sign trade contracts denominated in euros for their export transactions. The loans will promote greater procurement of Japanese machinery and equipment by increasing euro-denominated export transactions among Japanese firms.
Helped by structural reforms in the financial sector, the Turkish economy is now on a stable growth path following the economic crisis of 2000 and 2001. The country’s trade volume has also been rapidly increasing. With exports and imports both registering at record volumes in 2005, Turkey is now a focus of attention as one of the fastest growing countries following the BRIC countries (Brazil, Russia, India, China).