Turkey Financial News

Posted by meb at November 15th, 2008

[OPINION]
Saturday’s meeting of the Group of 20 leaders is a landmark in the evolution of global governance, one that I hope will create an opportunity to address a number of global issues.

We have reached this point due to the perceived impotence of our initial response to the economic crisis. That response was led by members of the Group of Seven: the old boys’ club of advanced countries that has traditionally taken the lead in tackling global crises.

The G-7’s dominant role in international affairs over the past half-century was explained by its collective economic weight: Between 1965 and 2002, it accounted for a remarkably constant share of global output - about 65 percent. In recent years, however, the G-7 began an evanescence. Its share of global output has fallen to 52 percent. By 2030, it is likely to be down to 37 percent; by 2050, to a mere 25 percent. (more…)

Posted by meb at November 15th, 2008

Turkey and the International Monetary Fund (IMF) could finalize a new deal in the near future, the head of the Fund said on Friday after meeting Turkish Prime Minister Tayyip Erdogan.

Turkey’s 10-billion dollar stand-by agreement with the IMF expired in May and the government is yet to decide on the future shape of the relations with the IMF amid global turmoil.

“It was a fruitful meeting. There could be a new deal in the near future,” broadcaster CNNTurk quoted Dominique Strauss-Kahn as saying after his meeting with Erdogan on the sidelines of the Group of 20 summit in Washington.

Erdogan and Strauss-Khan discussed the framework and maintenance of relations and agreed to continue technical works, economy officials told Anatolian Agency, adding Turkey and IMF would continue discussions to carry on relations at a certain level. (more…)

Posted by meb at November 14th, 2008

Turkish President Abdullah Gul joined Eastern European leaders in the Azerbaijani capital Baku on Friday for a summit aimed at promoting energy supply routes from the Caspian region to Europe that bypass Russia.

Gul, accompanied by Turkish Energy Minister Hilmi Guler, and the leaders of the Baltic nations, Azerbaijan, Georgia, Poland, and Ukraine gathered for the first time to discuss joint energy projects, including proposed oil and gas pipelines.

The Turkish president emphasized Ankara’s desire for a greater diplomatic role in the region, after his government earlier proposed a new forum for cooperation in the South Caucasus.

“The crisis which broke out last August in Georgia confirmed that unsolved conflicts in the region constitute a major threat from the perspective of security and stability,” he was quoted by AFP as saying.

“Our idea is to transform the South Caucasus from a region that is known for its conflicts to a region that would set an example for cooperation,” Gul said.

“Transportation of Caspian energy resources to European markets safely depends on maintenance of regional stability and establishment of good neighborly relations,” Gul said. (more…)

Posted by meb at November 14th, 2008

The international credit rating agency, Standard & Poor’s (S&P), revised Turkey’s credit outlook to negative from stable, saying the downside risks are more significant.

S&P also said it affirmed its ‘BB-/B’ foreign currency and ‘BB/B’ local currency sovereign credit ratings and its ‘BB+’ transfer and convertibility assessment on Turkey.

“The outlook revision follows a shift in the balance of risks to the downside as external financing conditions remain difficult,” S&P credit analyst David T. Beers said in a written statement late on Thursday.

“Although we expect Turkey’s current account to narrow in 2009 from a projected deficit of 7.3 percent of GDP in 2008, 2009 gross external financing needs will exceed 14 percent of 2009 current account receipts plus usable international reserves. This is one of the higher ratios among emerging market countries.” (more…)

Posted by meb at November 13th, 2008

Turkish Prime Minister Tayyip Erdogan arrived Thursday in the United States where he is going to represent his country in the meeting of Group of 20 leaders.

The G-20 meeting in Washington, hosted by U.S. President George W. Bush, would also be attended by the leaders of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, United Kingdom, United States and the European Union.

G-20 countries would discuss the possible joint measures that could be taken against the growing global turmoil, while for Turkey, Erdogan’s meetings with the IMF and other institutions on possible financial support packages would be monitored closely. (more…)

Posted by meb at November 13th, 2008

Turkey’s budget deficit was 31 percent lower in October than the same month in 2007, the Turkish Finance Ministry announced yesterday in a written statement.

The budget deficit for October was YTL 70.8 million, signaling that the government was somewhat successful in its efforts to maintain a disciplined fiscal system. The statement also said the 10-month primary surplus was 18.7 percent higher than the same period last year, reaching YTL 38.4 billion. According to budget totals for January to October 2008 released by the ministry, Turkey’s total budget deficit was YTL 4.9 billion for this period. From January to October 2008, budget expenditures were up 7.4 percent, while budget revenue increased by 12.7 percent. The budget deficit for the first 10 months of the year was 60.2 percent less than the same period last year. Budget revenue climbed to YTL 175.8 billion in this period. Turkey set its year-end budget revenue target to around YTL 204.5 billion. The 10-month figure indicates that Turkey has achieved 85.9 percent of this target so far.

Figures on budget performance in October 2008 made public by the ministry showed a primary surplus of YTL 1.9 billion. The ministry announced budget expenditures of YTL 15.2 billion against budget revenue of YTL 15.1 billion in October 2008. (more…)

Posted by meb at November 12th, 2008

Turkey needs $130 billion in foreign financing in 2009, resulting from short-term debt that needs to be rolled over, World Bank country director Ulrich Zachau told a conference on Wednesday.

The World Bank sees no problem with rolling over this debt, Zachau added in his speech at the International Finance Summit held in Istanbul.

Investors have been withdrawing from the Turkish economy as the global financial crisis has spread into emerging market economies and raised fears that some countries would be unable to finance their large current account deficits. (more…)

Posted by meb at November 12th, 2008

The Turkish government is set to take another step to stave off the adverse effects of the ongoing global financial crisis on the economy after having introduced incentives to encourage Turkish expats living abroad to bring their money into the country and households to contribute their personal savings to the economy.

The projected plan aims to attract Gulf capital to Turkey by creating interest-free instruments such as rent certificates, real-estate partnership bonds and participation certificates — known as sukuk in Islamic finance terminology. Anonymous sources from the government informed Today’s Zaman that the Treasury has already started working on these instruments and has sent a draft of a bill to the prime minister’s office. The same sources stated that the details will probably be publicized in a week’s time.

The idea of creating Shariah-compliant financial tools to attract capital owners with religious sensitivities against interest-yielding instruments has been on the current administration’s agenda since it first came to power in 2002. But to avoid fierce rejection by secular powerhouses, it had to shelve its intentions despite the fact that even centers of capitalism like the US and Britain have taken a great interest in interest-free finance. But global financial turbulence and the concurrent liquidity squeeze made the establishment of these interest-free tools urgently necessary. (more…)