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increased their bids at this months’ lira auctions after the government “asked” them to do so. As part of their response, they requested a revival of 10-year benchmark auctions providing potentially more profitable debt. Local lenders will also boost their lending via the government’s re-fuelled Credit Guarantee Fund. According to official demands, private pension funds will increase their investments in the government’s lira bonds and they will buy equities at Borsa Istanbul. So, the USD-denominated benchmark BIST-100’s problematic testing of the 2009 dips will be solved.
Reported S-400 delay helps lira. Meanwhile, the Turkish defence ministry has solved the latest lira depreciation pressure by indicating that there will be a delay in the delivery of Russia’s S-400 missile defence system, which the US opposes to the point where it is threatening sanctions, while President Recep Tayyip Erdogan has proudly announced tht he will meet with his US counterpart at the end of June during the G-20 summit in Japan (that’s okay, but what happened to the invitation to Trump to drop in on Turkey?). Less troubled relations between Ankara and Washington could go a long way to providing some relief to Turkey’s troubled markets. Russian President Vladimir Putin is perhaps a happy chappy as regards Syria because the Russian- backed Syrian forces are at last advancing in Idlib while the jihadists in Idlib are also perhaps cheered, with Reuters recently reporting that the Erdogan administration has provided them with US-made rockets to confront the attacks ordered by Damascus. The public lenders, who’ll nevertheless stay on duty 24/7, might exploit the absence of locals pursuing dollarisation on the market during a week long Bayram holiday, and with the help of foreign investors with more of a liking for the lira given latest geopolitical developments, may give Turkey’s currency a shot in the arm. An attempt at removing the Ekrem Imamoglu problem (opposition politician Imamoglu won a shock victory in the Istanbul mayoral election at the end of March, but Erdogan’s ruling AKP party claimed “irregularities” affected the result, which was then subsequently annulled by the election watchdog, with a revote scheduled for June 23) bedevilling Erdogan is taking the form of a vicious and heavy media campaign, suggesting Imamoglu aims to govern Istanbul together with the Kurdish PKK and the Gulenist FETO—the “terrorist” network blamed by Ankara for the 2016 coup attempt—and plans many other manipulations that push the limits of one’s imagination.
Talking to Ocalan, bombing PKK in Iraq. As for dealing with the Kurds, on the one hand the Erdogan camp is sending out the message that it may revive talks with imprisoned PKK leader Abdullah Ocalan—if in turn Ocalan can persuade Kurds in Istanbul not to ‘re-vote’ for Imamoglu, the AKP will be boosted in its bid to overturn his victory—while on the other hand quite a big rumble is now coming from a military operation waged in northern Iraq—that move obscures the Ocalan talks, and sends a ‘comforting’ message to nationalist voters that Ankara hasn’t stopped chasing the insurgent Kurds wherever it finds them. Retirement, social support and public wage payments were made by the state before the Bayram. Foreign tourists are coming, perhaps in droves.
The only thing missing is a new shock.
Turkish government to tap additional TRY2.5bn from private pension funds. Turkey’s Capital Markets Board (SPK) has ordered private pension funds to allocate a minimum 25% of their money market fund portfolios to government bonds and a minimum 10% of their standard funds to the Istanbul stock exchange by July 31, the SPK said on May 27. “Around 2.5 billion lira [$414.7mn] worth of short-term retirement funds will need to be transferred to domestic government bonds from repo until the end of July. We might see some new short-term issues by the Treasury... or the funds will have to buy from the secondary bond market,” an unnamed bond trader told Reuters on May 28. Turkish private pension funds have a combined TRY10.5bn in their liquid money market funds, according to unnamed bankers cited by the news agency. The net asset values for “money market funds” and “standard funds” currently stand at TRY9.6bn and TRY3.9bn, respectively, Seker Invest said on
88 TURKEY Country Report June 2019 www.intellinews.com