Page 40 - TURKRptSep20

Turks still pay a 1% Tobin Tax when they buy FX or gold via the banking system, while they also face a one-day settlement delay on individual purchases of more than $100,000 in FX.
Earlier in August, the Tobin Tax was scrapped for foreign financial institutions.
“Question really ​how much FX can the state banks sell​ to the point that people begin to doubt the broader durability of the banking system—therein this recycling of FX deposits to the defence of the currency is fine as long as deposits remain in the system,” Timothy Ash of Bluebay Asset Management wrote​ on July 29 in an emailed note to investors.
“​As soon as there is evidence of deposit flight​—which there has not been so far, and this also did not really happen in scale in 2018—then it turns into a whole new ball game. So far popular confidence in the banking system and the safety of deposits has been very solid,” he added.
“#​Turkey macro eerily resembles #Lebanon​. A) Banks saddled with huge $ deposits that are increasingly parked at CB; B) tourism collapse is leading to $ shortages; C) explosive TL liquidity is adding to $ demand; & D) FX intervention is causing negative net reserves. Can’t end well,” Amer Bisat, managing director of BlackRock’s sovereign and emerging markets alpha team​ in its global fixed income department, wrote on July 30 in a tweet.
Comparing Turkey with Lebanon is a new fashion​. After the Justice and Development Party (AKP) first took control of the government in 2002, Turkey was compared to Malaysia. Then, it was Iran. After the Idlib region across Turkey’s border with Syria turned into a base for jihadis, Pakistan was brought into the comparisons, due to the Tora Bora region of its neighbour Afghanistan.
Lately, Venezuela has also entered into picture.
North Korea also gets a run-out, given Turkey’s non-stop social media regulations. Turning into Syria is always a concern in Turkey too.
Central African countries have long been Turkey’s credit rating peers. When will we get to direct comparisons with Afghanistan and Somalia?
Islamic State (ISIS) can also bear some mention as Ali Erbas (below), head of the Turkish state’s religious affairs directorate (Diyanet), earned notoriety for hanging about with a sword following the controversial reconversion into a mosque of Istanbul’s Hagia Sophia (Erbas explained that it is an Ottoman tradition to hold a sword at mosques that are symbols of conquest).
40​ TURKEY Country Report​ September 2020 ​ ​www.intellinews.com