Page 6 - TURKRptMay19

$718mn. Turkey is “arguably in a second sudden stop” in its BoP . Foreign trade deficit continued to contract, at a clip of 68% y/y in March to $1.97bn, while the Q1 contraction was recorded at 72% y/y , producing a figure of $5.95bn.
Turning to IMF is now “easiest option” for Turkey “and the sooner the better”. ‘Lira crisis factors are still in place’. Refinancing season progresses undeterred. IMF says no reason to believe Turkey “even contemplating” asking for Fund assistance .
Budget deficit continued to grow , albeit at a relatively limited pace compared to the first two months of 2019.
The current consensus suggests that the Turkish lira is not expected to depreciate this year as much as it did in 2018 when it sank into a currency crisis. The main supporting argument for this contention is the recovery in the current account deficit. However, when the bigger picture is examined it is not possible to conclude with any real certainty that the currency will retain relative strength .
The lira still seems under the control of the ‘invisible hand’ of officials that strive to set depreciation barriers. Lira “remains vulnerable to shocks” .
Residents’ FX deposits declined by $586mn to $181.3bn as of April 12 . EBRD ‘stands ready’ to increase Turkish bad loans help if asked. Shares
in Turkish state-owned banks rally on news of capital injection .
On the external debt roll-over front, Akbank, Ziraat Bank and Eximbank concluded syndicated loan renewals since March despite the latest turmoil on the domestic financial markets prior to the local polls. Roll-over news from Garanti Bank and the others is awaited . Banks are net debt payers.
State-owned Ziraat Bank’s Islamic banking unit Ziraat Katilim announced that it has obtained a $250mn, 367-day syndicated loan. Eximbank obtained $630mn syndicated loan.
Denizbank is 'unlikely to delist from Borsa Istanbul' after Emirates NBD takeover from Sberbank.
As Erdogan is showing signs of defiantly following his own agenda despite alarming fragilities besetting his country, the Turkish markets remain in a roller-coaster mood . Raiffeisen sees nothing to sustain new gains on Borsa Istanbul . ‘Erdogan attack on short sellers’ ignited big sale of Turkish stocks and bonds among foreign investors .
Turkey credit rating is not at risk but further lira fall would be “very, very bad news”: S&P Global .
Istanbul’s Ataturk airport sends off last commercial flight after 66 years of operation.
Turkish mobile operator Turkcell completes sale of Fintur shares. Eaton completes acquisition of Turkish electrical equipment producer Ulusoy.
6 TURKEY Country Report May 2019 www.intellinews.com