Page 4 - TURKRptOct20
P. 4
1.0 Executive summary
Doctors are ‘choosing who gets an intensive care unit chance of life as Turkey’s COVID-19 outbreak goes out of control.’ Ankara “has become Wuhan”. Northern Cyprus halted flights from Turkey on coronavirus fears.
USD/TRY latest record: 7.8542 on September 29. Has Erdogan reached the limits of siphoning hard currency from local banks?
Moody’s hit Turkey with downgrade to all-time lowest rating in unscheduled move. It later warned of autumn peril.
Turks are buying physical silver too. Foreign investors' share in Turkey’s sovereign eurobonds fell south of 50%.
Monetary tightening continues bit by bit. Turkey's home sales growth braked in August.
Erdogan turned to hot money. Will rate hike help in meeting FX liabilities? US ambassador hit out at ballooning debts owed to pharma companies by Turkish state hospitals.
All roads for Turkey will converge in the autumn, with the US presidential election to be held on November 3 and Turkish borrowers having to roll over chunky external debts ahead of ongoing risk items, including that election, coronavirus, geopolitical adventurism, domestic politics threatening to come to the boil and severe troubles in the real economy.
Coronavirus ‘will weaken asset quality of Turkey’s banks but official data might not show it’ (See Section 8.1.4). Turkish companies are “seeking more time to repay loans”. Fitch downgraded outlooks on Turkish corporates on sovereign downgrade (See Section 8.4).
Akbank was “in the market” to kickstart syndicated loans refinancing season for Turkish banks.
Erdogan hiked taxes on imported cars. Trade deficit jumped in August on an export slump and bold gold imports.
Turkey’s airline industry ‘needs $750mn to survive through 2020’. Air passenger traffic at Turkey’s airports plunged 63% y/y in January-August.
Google will impose a 5% fee on Turkish advertisers citing higher regulatory costs.
Erdogan extended feed-in-tariff for renewable energy plants till June 2021.
Unfrozen Azerbaijan, Armenia conflict yet to spook oil, gas markets. Erdogan ‘asked Macron to drop objections to Turkey co-producing Eurosam SAMP/T missile systems’.
4 TURKEY Country Report October 2020 www.intellinews.com
