Mavi Boncuk |
Berat Albayrak, who has faced criticism for failing to tackle the country’s growing financial crisis, spoke to around 6,000 investors on a conference call[1] to rebuff concerns that a funding squeeze on Turkey’s banks and a damaging trade war with the US would force him to seek a rescue bailout from the International Monetary Fund (IMF).
Albayrak, who was appointed as finance minister last month by his father-in-law, president Recep Tayyip Erdoğan, said Turkey will not hesitate to provide support to the banking sector, which was capable of accessing funds itself during the current turmoil in financial markets. He added that deposit withdrawals by panicked investors remained low and manageable.
The Turkish lira was up 4% against the US dollar following the conference call and after reassuring words from the French president, Emmanuel Macron, and Germany’s chancellor, Angela Merkel, that Turkey’s stability was important. A pledge by Qatar to invest $15bn in the financial sector has also helped stabilise the situation.
However, Albayrak’s attempt to shore up confidence in the lira was quickly undermined by the US Treasury secretary, Steve Mnuchin, who reportedly told president Donald Trump in a cabinet meeting that he was preparing further sanctions against Ankara.
The lira slipped back to settle at just 1% up on the previous day.
The finance minister’s intervention also touched on the impact of US trade tariffs, which Trump imposed after Turkey failed to release pastor Andrew Brunson.
Last week Trump said he would increase import duties on Turkish steel imports to 50% and on aluminium to 20%, tweeting: “Our relations with Turkey are not good at this time!”
Albayrak said the country will turn to other partners – such as China and Germany – to help it navigate the current situation. He added that major corporations that have large borrowings in US dollars were in a comfortable position to meet short-term liabilities.
Turkish officials announced on Wednesday that they would be increasing tariffs on imports of certain US products as a local court denied the pastor’s appeal to be released from house arrest.
Source: The Guardian
[1] David Lubin moderated Turkish Finance Minister Berat Albayrak’s conference with investors.
He is Managing Director and Head of Emerging Markets Economics
David Lubin is Managing Director and Head of Emerging Markets Economics at Citi, responsible for a team of 30 economists in 15 locations globally. Before joining Citi in 2006, he worked for many years at the HSBC Group where his responsibilities included representing Midland Bank in sovereign debt restructuring negotiations under the Brady Initiative in the early 1990s, with a number of developing countries including Argentina, Brazil and Bulgaria. His views on emerging economies are widely quoted in the press, and he was responsible for Citi's landmark 2012 study, China and Emerging Markets, which explored the interaction between China and other emerging economies. He has a degree in Philosophy, Politics and Economics from Oxford University.
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