Page 19 - TURKRptSep20

2.5​ ​How Ankara is selling “fake” domestic USD papers to dollar-short state banks
The Turkish Treasury sold $3bn worth of USD-linked domestic bonds due August 2023 to local banks via direct sale, Turkey’s finance ministry ​said​ on August 26.
The papers will pay a 1.87% semi-annual coupon.
The Treasury’s FX and gold-denominated domestic debt stock jumped to TRY256bn as of August 21 from TRY218bn as of end-July.
The central government debt was up 42% y/y to TRY1.72 trillion, equivalent to 40% of the 2019 GDP, at the end of July while FX and gold-denominated debt stock was up 49% y/y to TRY892bn.
On August 15, market observer @e507 ​recognised​ that government-run deposit banks—namely Ziraat, Vakifbank and Halkbank—had bought $5bn of FX-denominated papers in the past 20 days.
Moreover, the papers were not “eurobonds” which are sold abroad on international markets, but were categorised as “other bonds”, he wrote in a tweet thread, basing his observations on regular weekly data from Turkish banking watchdog BDDK.
19​ TURKEY Country Report​ September 2020 ​ ​www.intellinews.com