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May 28 in its daily market watch.
Not the first time. This is not the first time that the currency crisis and recession-hit Turkish government is “encouraging” private pension funds to invest in line with its economic bailout policies. Pension funds have already bought local lenders’ mortgage-backed securities issued via the Turkish Development Bank (TKB). The total amount of mortgage-backed securities issued via the TKB stands at around TRY4.7bn since last November. However, there is no available data on the pension funds’ purchases. The total fund size of the Turkish pension funds industry was TRY94.5bn as of May 17, while mandatory pension funds accounted for TRY5.9bn, according to the latest data from the pension monitoring center. Turks try to avoid the private pension system since the funds’ returns are lower than inflation and the return on dollars. However, the government is getting ready to introduce a tighter mandatory participation system.
Another favourite fund. Another favourite fund of the Turkish government is the unemployment fund. It has been used to strengthen the equity of public lenders. The unemployment fund is also in the red due to buying domestic government bonds at lower interest rates and paying employment incentives to private companies. The capital in the unemployment fund was TRY130bn as of April. As things stand amid Turkey’s economic turmoil, it is clear that the government is overcoming the lack of appetite to provide for its domestic borrowing needs via “encouraging” local lenders and pension funds to buy government bonds and it is overcoming its foreign borrowing shortage via “encouraging” local lenders to park their offshore FX deposits at the central bank to comply with rising reserve requirement ratios. The course of the USD/TRY rate and government bond yields, meanwhile, still seem subject to the control of the “invisible hand” of the government, which for several years has successfully ‘bought time’ with such tactics.
The Treasury is collecting bids for 364-day EUR-denominated domestic lease certificates by May 29, it said on May 27. The lease certificates will semi-annually pay 1.50% coupons. Scrambling to raise revenue, the government will soon introduce a new legislative amendment that will permanently allow citizens to avoid military national service by making a payment.
Turks should expect tax hikes, including the one-time taxes that featured in Turkey’s 1994 crisis, following the Istanbul revote on June 23, Ozan Bingol of Baskent Universiy told daily Cumhuriyet on May 28.
Turkey’s sovereign wealth fund to issue bond. Daily Sabah reported Turkey’s sovereign wealth fund TVF general manager Zafer Sonmez as saying that the fund was readying to issue a bond this year as part of a planned bond issuance program.
9.0 Industry & Sectors 9.1 Sector news
9.1.1 Oil & gas sector news
Turkey has cut its heavy reliance on Iranian crude in the past year.
Turkey has closed its ports to Iranian oil: reports. Turkey appears to have closed its ports to Iranian oil, reports indicated on May 21. That would mean Ankara is fully complying with the US drive to cut Iran’s crude shipments on the world oil market to zero—but the move would fly in the face of
89 TURKEY Country Report June 2019 www.intellinews.com