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latest Fed easing, the government may solve its capital inflows problem.
The risks of it all blowing up in Turkey’s face be damned, Ankara is presently trumpeting headline macroeconomic and market indicators pointing to an apparent impressive turnaround from the economic morass the country sank into following last year’s currency meltdown.
The depressing picture that was seen in inflation and other official indicators was dispelled following the appointment of a close associate of Finance Minister Berat Albayrak in the management of national statistical institute TUIK, the currency depreciation and volatility were solved with USD sales via public lenders and the overnight scrapping of London’s offshore lira swap market, the problem of growing non-performing loans (NPLs) was addressed with debt restructurings, booming fruit and veggie prices were defused with government-decreed discount sales and... the list goes on.
Indirect CDS sales​. One remaining difficulty—that of Turkey having one of the highest credit default swap (CDS) rates in the world—is, so the speculation goes, being targeted with indirect CDS sales from owners.
High dollarisation, of course, is another persistent bugbear. Everything has been tried to rein it in but here FX deposits held by banks come in handy to support the central bank reserves and they do not set off alarm bells in FX demand as they are merely bank records.
Nevertheless, dollarisation is a real drag for those working on Turkey’s image and boosting domestic confidence. That confidence is so far from where officials would like it to be because, with enough foreign financiers having closed the credit taps to Turkey, Erdogan does not have the wherewithal to bribe his way to a majority. The 2018 currency crisis threw Turkey’s dream of soon becoming a trillion-dollar economy entirely off the rails and has inflicted wretched economic pain on the country’s population. Not so many folk remain ready to buy into stories of a bright future or believe the country’s woes are entirely down to invisible, conspiratorial “external powers”.
Cyanide ‘the enemy’​. November brought three collective family ‘cyanide’ suicides in the face of hardship. But the enemy of course can’t be economic mismanagement or anything you could lay at the door of Turkish President Recep Tayyip Erdogan. The enemy must obviously be the cyanide, or its purveyors. Hence, Erdogan’s spokesman Ibrahim Kalin on November 19 pronouncing “Cyanide became one of the most searched words on Google and search engines after 11 of our citizens died in three incidents. I would like to underline that these are not collective suicides but murders.”
Turkey’s government was now working to curb cyanide sales and planned to establish a system to track the poison, according to Kalin. Three cheers for that man!
On November 9, following the first two of the family suicides, a satirical discussion opened on popular local forum Eksi Sozluk—amusingly it turned out that the discussion did not go as far as reality was set to go as all that participants could come up with was a recommendation for an “additional tax on cyanide”.
Turks, you see, believe Turkey “is a funny country as long as you’re not a citizen of it”.
Discovery in Turkish Thrace​. But behold! November 20 brought good tidings. News from Ihlas News Service that, if you’re not careful, could have you believe the nation’s economic problems are all over. “Equinor, Valeura reportedly discover 286 bcm of natural gas in Turkish Thrace” read the headline.
81​ TURKEY Country Report​ December 2019 ​ ​www.intellinews.com