foreign currency
Turkey's depletion of foreign exchange reserves and the fact that a majority of its forex reserves are swap lines has created mass distrust in the economy, Turkish Industry and Business Association (TÜSİAD) Chairman Simone Kaslowski said. Turkey needs to “ensure full market confidence” to attract long-term financing flows, Kaslowski said during a videoconference on Sept. 24.
Ali Rıza Güngen writes: In Turkey, a portion of the risk stemming from foreign currency loans has been transferred to the public. In other words, not the individual debts but the risk has been spread to society.
The Turkish Central Bank on Aug. 20 kept its one-week repo rate – also known as the policy rate – constant at 8.25 percent, holding it unchanged for the third straight month. "The gradual normalization of pandemic-specific financial measures and recent tightening steps taken in liquidity management are judged to support macrofinancial stability," said the bank statement.
For a long time, Ankara had eroded foreign currency reserves worth near 100 billion to hold the rate. Now, it has come to the end of the road. It has spent its last penny and left the rate to the markets. Thus, the “unheard of” invented exchange rate regime has collapsed.
Can the forex loss in Turkey be recovered without sending the bill to the public? If first signs of the establishment of political normalization, democratization and rule of law emerge in a powerful way in Turkey, then the “shrunken” foreign currencies will come back to the system.
Excluding swap lines, Turkey's Central Bank's net reserves stood at $13.4 billion in the negative as of the end of April, according to economist and former Treasury Advisor Mahfi Eğilmez. The primary reason behind the foreign currency reserves falling by $28.5 is the sale of the Central Bank reserves, he argued. Eğilmez also said that there has been a decrease of $1.5 billion in foreign currency bank accounts in the past week.
In those countries where it is presented as they have a “floating exchange rate regime,” if their central banks are intervening at the exchange rate, the name of this in economy literature is “fear of floating.”
Turkey was caught with the coronavirus outbreak at a time when it was weak structurally. Just like in the COVID-19 epidemic, the underlying disease story is the story of those problems in economy which were “swept under the carpet” for a long time. Turkish government's economy policies after 2018 were based on bans, limitations and covering up of the symptoms rather than resorting to necessary steps to solve the problems.
One of Turkey's largest supermarket chains has closed the 2019 fiscal year at a loss of 492,112 Turkish Lira (over $75,000), an independent audit revealed to the Public Disclosure Platform (KAP). A company balance sheet revealed half of the company's total liabilities to be in foreign currencies, indicating the 2019 losses for Migros could have been triggered by the fluctuations in foreign currency exchange rates.
The gold and dollar exchange rates in Turkey surged to record highs Feb. 24, dropping again on Feb. 25 after markets opened and traders started to sell. Dollar prices rose as high as 6.16 TL during the day, marking a new high for the last 9 months. The price of 1 ounce of gold reached $1,688, and the price of one gram of gold reached a record price of 334 TL.
The total amount of Turkish lira held in bank accounts in Turkey reached the 1.2 trillion TL mark, while accounts denominated for foreign currency held $224.7 billion, according to recent Central Bank figures pertaining to the week ending on January 31. The amount of consumer credit stood at 460.5 billion TL, while the amount of installment commercial loans totaled 379.5 billion TL. More than a third of the consumer credit, 188.8 billion TL, pertained to mortgage and housing loans.
Editor's Picks
duvar englis podcasts
Ankara's conflict-oriented foreign policy has received the public's support for military operations, but public opinion often fails to translate into votes. While Ankara's "enemy" in military conflict is ever-changing, the northern Syria conflict was revealed to be the only intervention that expanded the government's voter base.
Selahattin Demirtaş writes: You have re-arrested us after six years. You say we are the instigators of the Kobane massacres when we were actually the victims. Do you think you will be able to make us responsible for this through conspiracies based on secret witnesses and be saved from responsibility? You must genuinely believe that the fascism you rely on today will always exist.
Politics
Turkey's Deputy Interior Minister İsmail Çataklı has said that reports of Ankara mulling re-imposing curfews are "completely baseless." Çataklı's comments came after Reuters, citing a senior official, said that the government is weighing the re-implementation of lockdowns to stem rising coronavirus cases in the country.
President Recep Tayyip Erdoğan's salary has been raised by 8.3 percent to a total of 88,000 Turkish Liras, as part of a budget proposal submitted by the ruling AKP government to parliament. Erdoğan's new salary will be effective as of January 2021. Earlier in October, Erdoğan had urged the believers of Islam to have “patience” in the face of financial problems.
Some 32 deputies in parliament failed to take the stand except to take an oath, daily BirGün reported on Oct. 21. A total of 27 of said deputies were members of the ruling Justice and Development Party (AKP), receiving more than 500,000 liras in annual salaries when combined.
The trial into the murder of prominent Kurdish human rights lawyer Tahir Elçi started on Oct. 21, amid further obstacles to securing an effective investigation into the killing. None of the three defendant police officers attended the hearing in person in the courtroom, but instead appeared via the video system. Elçi family's lawyers said that this is against the normal procedure and the case was being handled in a “negligent” and “impartial” way.
Turkish police have seized 879 animal and plant fossils worth $10 million from two houses owned by Islamic televangelist cult leader Adnan Oktar. Officials said the fossils would be delivered to a museum in Ankara.
The Istanbul 15th High Criminal Court has rejected exiled journalist Can Dündar's appeal against the seizure of his assets. The court has said that it has found the 14th High Criminal Court's Oct. 7-dated decision “in accordance with procedure and law.”
In a parliamentary question addressing Interior Minister Süleyman Soylu, HDP lawmaker Ali Kenanoğlu has asked what kind of legal proceedings the ministry has run against the assailants of 36 publicly known hate crime incidents that were committed against Alevis in the last eight years. Kenanoğlu's inquiry came after unidentified assailants on Oct. 20 painted threatening messages on an Istanbul apartment building housing Alevis.
Turkey said it would not hesitate to send soldiers and provide military support for Azerbaijan if such a request were made by Baku. "There is already a military cooperation agreement between Turkey and Azerbaijan. If there is a need and Azerbaijan makes such a request, then Turkey would do it openly [provide military support]," Vice President Fuat Oktay said on Oct. 21.
Unidentified assailants have stabbed a 14-year-old Syrian child to death in Turkey's Central Anatolian province of Konya. Vail El-Mansur was on his way to the tailor shop he was working at when he was murdered brutally.
Turkish authorities seized 220 kilograms of cocaine on a ship that arrived at a port in the country's southern coast from Brazil. Police in the coastal province of Mersin found the cocaine hidden in a container carrying packages of paper.
Istanbul University's Cerrahpaşa Medical School has been observing twice as many patients, the dean said on Oct. 20. Turkey's official numbers receded to early May levels on the same day, observing some 2,026 diagnoses. "There's almost a doubling of the number of cases and patients seeking help in Cerrahpaşa. The winter might be rough for all of us," the dean said.
Turkey will send some 110,000 tons of grains and flour to countries in need, primarily Syria, a presidential decree in the Official Gazette said on Oct. 21. While the grains will be handed out by Ankara's Disaster and Emergency Management Authority (AFAD) and the Turkish Red Crescent, any wages related to the operation will be taken out of the Treasury's budget as well.
During a recession that has dealt a deep blow to agricultural producers across Turkey, potato farmers are struggling to get by while retailers purchase produce cheap and sell at high prices to consumers. "I don't like the AKP anymore,” said one 70-year-old farmer, who has grown potatoes in Niğde for 45 years.
A controversial social media legislation has enabled the Turkish government to swiftly block access to scores of news reports from critical newspapers and websites within the past month. "What we are facing is a heavy censorship mechanism,” cyber-rights expert Yaman Akdeniz told the daily Cumhuriyet.
The death of Serkan Tumay in a prison raised concerns on the prison conditions in Turkey once again. While Tumay's family says that he was tortured by prison guards repeatedly and died as a result in Kırıkkale F-Type Prison, opposition deputies Ömer Faruk Gergerlioğlu and Gülizar Biçer Karaca asked Justice Minister Abdülhamit Gül to explain how he died.
The European Court of Human Rights (ECHR) has found Turkey guilty of violating the right to free speech of Prof. Baskın Oran and Prof. İbrahim Kaboğlu, who faced prosecution in 2005 for publishing a report on the country's minorities. The ECHR said that the legal proceedings against the two academics had “inevitably created pressure" on them leading to “self-censorship.”
The Coalition for Women in Journalism has launched a petition demanding that Turkey immediately drop charges against journalist Ayşegül Doğan, who prosecutors accuse of "being a member of an armed organization." "Today, Ayşegül Doğan has become the target of the government due to her journalism, which touches on social issues such as the struggle for peace, women's struggle and labor," read the petition.
Five years later after the killing of Kurdish lawyer Tahir Elçi, the case still remains unsolved, amid claims that the Turkish intelligence service's neglect played a role in the murder. Diyarbakır Bar Association and Tahir Elçi Human Rights Foundation have criticized the indictment in the murder case, saying that the inclusion of an alleged PKK member as a suspect in the case is inconsistent and is an attempt to divert the attention from the real perpetrators.
A HDP lawmaker has submitted two separate parliamentary questions inquiring about the whereabouts of Bahtiyar Fırat who went missing on Oct. 14 amid concerns that he might have been abducted by state agents. MP Sait Dede asked Interior Minister Süleyman Soylu and Justice Minister Abdulahmit Gül if they will issue a statement with regards to the fate of Fırat considering that 17,000 people have been so far victims of enforced disappearances while under detention in Turkey.
Economy
The Turkish government has said that it "laughs off" boycotts imposed on Turkish products in Saudi Arabia, Morocco and United Arab Emirates. "We laugh off some countries' boycotts against Turkey. They should first learn to stand as independent countries," AKP deputy leader Numan Kurtulmuş said on Oct. 18.
The International Monetary Fund (IMF) projected that income per capita in Turkey would drop to 2005 levels, an annual average of $7,720. The IMF also predicted a five percent contraction in the Turkish economy until the end of 2020, despite Ankara's 0.3 percent growth projection.
Turkey's net international investment deficit grew by $20 billion from the end of 2019 to reach a total $365.8 billion at the end of August. Turkey's international assets shrunk by 10.2 percent to reach $227.4 billion in the same period.
President Erdoğan on Oct. 17 announced the discovery of an additional 85 billion cubic meters of natural gas in the Black Sea, following a similar find in August. As a result of testing, analysis and detailed engineering work, another 85 billion cubic meters were added to the reserves we had discovered. The total amount of natural gas reserves in the TUNA-1 well of the Sakarya Gas Field reached 405 billion cubic meters," Erdoğan said.
Data from the Turkish Statistical Institute (TÜİK) revealed a dip in real estate sales vis-a-vis last year in September, dropping by 6.9 percent for some 136,744 residences sold. Meanwhile, the total volume of sales between January and September was larger than the number in 2019.
Urban Beat
Kurdish artist Zehra Doğan's work that she created during her two prison sentences between 2016 and 2019 are on display in Turkey for the first time. The artist was jailed on terrorism charges and gained international fame after finishing her second sentence and holding a show at London's Tate Modern.
Turkey's Presidential Symphony Orchestra will thrive thanks to the completion of its long-awaited music hall, Conductor Cemi'i Can Deliorman said. Having been in the works for 25 years, the music hall's large auditorium can seat more than two thousand viewers.
Alterations on Istanbul's iconic Hagia Sophia reportedly violated guidelines mandated under the site's "UNESCO World Heritage" status. Converted within two weeks of the legal ruling that allowed Muslim worship, the ancient structure's mosaics were unlawfully covered up, and any work on it was deemed practically impossible, architectural publication Mimarlık Magazine reported.