Page 6 - TURKRptMar22

In the Western media, the Montreux Convention regulating the passage of vessels including warships to the Black Sea and the combat drones of Erdogan’s younger son-in-law are overdone topics once again. The main idea is always that all possible countries should fight against Russia.
However, Erdogan has not notched up such a conflict. The closest he came was in November 2015 when a Russian jet was downed by a Turkish jet after a claimed Turkish border breach. But by June 2016, Erdogan was writing a letter to Vladimir Putin to apologise.
So far, Erdogan has managed to sit on the fence between the West with Ukraine and Russia. Where things go from here is by no means clear.
In the unfolding warfare, Ukraine was still resisting as of March 7. See how the Russians are painting eastern Ukraine red on the live map here.
When it comes to the Turkish economy, monetary conditions became tighter in Turkey from December 20 and much economic activity has come to a near halt. Europe (read as “Turkey’s exports”) has also endured a slowdown so far in 2022.
In January, Turkey’s trade deficit boomed. It remained high in February. March will also produce a high deficit. The government has again been circulating prospective “tourism revenues” as the big cure for Turkey’s ills.
Each year, the same stories circulate like clockwork. The problem is that the Turkish government is found believing in its own flawed stories.
By 2018, the Erdogan regime had won through with all its big gambles. Since that year, it has lost them all.
On the global front, tension is growing over upcoming monetary tightening but the markets seem to have evaded a turbulent end of the new-year rally. May this year could be brutal.
On February 11, Fitch Ratings downgraded Turkey’s sovereign rating by one notch to B+, four notches below investment grade, with a Negative outlook.
More downgrades are on the way.
The capital of the public banks has been hiked (via the circulating of some government papers among the Treasury, Turkey Wealth Fund (TWF/TVF) and the banks again).
The government has also been talking about pumping some TRY60bn into the economy via the Credit Guarantee Fund (KGF). Turkey generally eats TRY60bn worth of loans for breakfast. Each time the loan pump starts up, it is with “targeted” and “limited” labels.
Since the Putin regime shook up global markets by launching a full-blown invasion of Ukraine on February 24, the Erdogan regime has been struggling to keep the USD/TRY pair below the 14-level. It has still not lost control, but it has been burning through the reserves again, sending high volumes up in smoke.
February 24 was a real shock. On the day, the USD/TRY broke the 14-barrier and saw the 14.70s. Turkey’s CDS moved into the 600s.
Brent oil on March 7 saw $139. The FAO food price index broke record in February with 140.7.
6 TURKEY Country Report March 2022 www.intellinews.com