Türkiye's economy chief on Friday announced he had instructed a new capital increase for the state-owned export credit agency, marking the third such hike since July last year in a bid to further bolster exports.

The capital hike for the Türk Eximbank is part of the government's policies to facilitate access to financing and increase export support, Treasury and Finance Minister Mehmet Şimşek said.

"We have had consultations with our Trade Minister Ömer Bolat. We have initiated works to increase the capital of Türk Eximbank for the third time in the past seven months to provide support to our exporters, and will conclude them as soon as possible," Şimşek said.

Türk Eximbank had extended $42 billion (TL 1.29 trillion) in lending to exporters in 2023, including $19.6 billion in cash loans and $22.4 billion in receivable insurance and guarantees.

Şimşek expressed the bank's goal to provide $50 billion in support to exporters throughout 2024.

The government sees exports as one of the key areas it looks to rely on to curb chronic current account deficits and ensure sustainable economic growth.

Outbound shipments rose 3.6% year-over-year to more than $20 billion, marking the best January sales ever. Imports shrank by 22% to $26.2 billion.

The foreign trade deficit narrowed by 57% to $6.2 billion.

The nation's exports reached a third straight annual peak to a total of $255.8 billion in 2023, up from an earlier record of $254 billion in 2022.

The momentum came despite multiple challenges, including devastating earthquakes that struck Türkiye's southeastern region a year ago, as well as lower demand in some key markets, including the EU, where around half of exports go.

The government's medium-term program (MTP) estimate was set at $255 billion for 2023. The government sees shipments reaching $267 billion by the end of this year.

Şimşek is leading an administration that orchestrated a shift from a yearslong easing policy and delivered aggressive interest rate hikes after last year's election to arrest soaring inflation, which climbed to an annual 64.9% in January, rebuild foreign exchange reserves and stabilize the Turkish lira.

Over a series of hikes by the central bank, interest rates have gone from 8.5% in June to 45% late last month, a move widely welcomed by foreign investors.

The bank signaled last month that the tightening cycle was complete but its new Governor Fatih Karahan on Thursday kept all options open, stressing that the tight monetary stance would be reassessed should there be a significant deterioration in the inflation outlook.

Şimşek reiterated the government's strong commitment to policies supporting exports and exporters. He noted Türk Eximbank's TL 13.8 billion paid-in capital at the beginning of 2023, emphasizing a capital hike of TL 6.8 billion approved in July last year and a TL 3.3 billion increase this January.

Şimşek said the bank secured $500 million in financing from international capital markets last week. "Efforts are ongoing to secure up to $1.5 billion from supranational financial institutions with terms of up to 10 years with favorable costs, to meet the long-term financing needs of our exporters, by the first half of 2024," he noted.

"With the strong support of our government, Türk Eximbank will achieve its 2024 targets, further enhancing its support to our exporters."

Şimşek also referred to the central bank's daily rediscount loan limits for exporters, which he said has been increased tenfold to TL 3 billion.

The limit was increased from TL 1.5 billion in September. In July, the bank lifted the limit for extending these loans from TL 300 million.

Şimşek noted that adjustments to rediscount limits would continue according to demand.

Şimşek also stressed the importance of enabling loan utilization with various types of collateral alongside guarantee letters to address the issue of access to funding for exporters.

"Following capital increases, the bank's efforts to lower costs by providing collateral ease to exporters will accelerate. Through this initiative, loans will be extended to firms with high credibility and export value without guarantee letters and with other collateral types accepted in the banking sector," he added.

Şimşek underscored qualified investment and employment as the ultimate goal of the government's economic program. He affirmed their commitment to continue extending support in line with the priority of exports.

"We will do whatever it takes to increase the contribution of exports to growth and achieve balanced and sustainable high growth. The support provided by our government to exports will continue to increase in line with our country's goal of export-oriented growth," Şimşek noted.