Page 4 - TURKRptMar20
P. 4
1.0 Executive summary
Turkey is officially growing 5%. Think long and hard before you say a person who sets themselves alight in Erdogan’s Turkey may have succumbed to economic despair.
Erdogan is in de facto war in Libya and Syria’s Idlib province. He is currently chasing up a meeting with Putin but Putin is stalling. Erdogan is desperately in need of a believable and controlled security threat to distract the Turks from their economic troubles. He can’t very well attack the Kurds in northeast Syria as they have wisely moved out of range, there are no Kurdish PKK militants left in Turkey and anti-terrorist operations in mountainous, northern Iraq just don’t get the public’s blood racing. Libya is not igniting much interest among the Turks as it seems far, far away, and there are no Kurds there. And the Turks are also not interested in the Cyprus “illegal drilling” tripe.
The best option for Turkey would be if someone could convince Erdogan that now is the right time to call snap elections. The time of ‘Erdoganomics’ will be at its end not long from now. The country’s endured 17 long years of the present regime and if there’s another economic crash, Erdogan’s got no chance at the polls. His chances of building a pure dictatorship, meanwhile, seem to have dribbled away.
“Nothing to do with the rule of law,” a Western diplomat speaking on condition that he not be identified by name commented on Turkish judiciary.
“There are some 18mn unregistered guns in Turkey”.
It is impossible to avoid anymore that lira is subject to “managed float” regime. The BDDK reduced the limit for Turkish banks’ forex swap, spot and forward transactions with foreign entities to 10% of a bank’s equity after lira broke the official wall built at 6 against USD.
An additional TRY150-175bn credit impulse via Credit Guarantee Fund is on the way.
The central bank is tapping more dollars from local lenders via swaps. The Treasury sold $1.1bn worth of $-denominated sukuks to local lenders via direct sale.
The central bank imposed limits on fees and commissions charged by lenders to their clients. UniCredit sold another 12% stake in Yapi Kredi (YKBNK) after HSBC announced its plans to sell Turkish unit. Garanti (GARAN) and Akbank (AKBNK) recorded profit growth in Q4 as expected. “A cheap hamburger does not bring contentment.”
Local banks hired Ernst & Young to analyse launching an asset management company (AMC) to house billions of dollars of bad debt.
Conglomerates Yildiz, Dogus launched a second round of debt restructurings to lower interest rates on their already restructured loans. South Korea's SK Holdings and Dogus Holding mandated BofA, Citi to weigh options for their Turkish e-commerce portal n11’.
Istanbul Airport is ‘in talks with Chinese and Gulf banks to refinance €5.7bn of loans’. $7.3bn Istanbul-Izmir motorway ‘is on sale’. Turkish conglomerate STFA Investment Holding and Swiss Partners Group Holding ‘mandated Citigroup for a potential sale of Enerya’, a leading natural gas distributor in Turkey.
4 TURKEY Country Report March 2020 www.intellinews.com
