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☆ Analysis: Investors lament lost opportunity after unconvincing Turkish rate hike
▼ + stars: | 2023-06-23 | by ( ) www.reuters.com time to read: +4 min

REUTERS/Murad Sezer/IllustrationLONDON, June 23 (Reuters) - Foreign investors hoping for a game-changing rate hike from Turkey's newly appointed central bank chief said Thursday's disappointing move to a key rate of just 15% could keep some money on the sidelines. "They lost one perfect chance to demonstrate that they mean business," said Viktor Szabo, emerging markets investment director with Abrdn. But analysts said that after Thursday's decision, Erkan and Simsek would need to work even harder to prove the country had indeed shifted course. Already in the week to June 16, foreign investor holdings of Turkish government bonds had fallen by $16.2 million. "I don't think investors will throw in the towel just yet because I think there is still expectation there is more to come in the coming months," said Kaan Nazli, portfolio manager at Neuberger Berman.

Persons: Murad Sezer, Thursday's, Hafize Gaye Erkan, Viktor Szabo, Abrdn, it's, It's, Tayyip Erdogan, Mehmet Simsek, Eric Fine, Marek Drimal, Simsek, Dan Wood, William Blair, Fitch, Erdogan, Erkan, Kaan, Neuberger Berman, Karin Strohecker, Marc Jones, Toby Chopra Organizations: REUTERS, Societe Generale, Thomson Locations: Istanbul, Turkey, VanEck

The central bank said inflation will come under further pressure. Erdogan said last week he approved the steps Simsek would take with the central bank, suggesting he had given the green light to rate hikes. The central bank's key rate remains below deposit rates that reach up to 40% and real rates are still deeply negative. The central bank's net reserves fell to a record low of negative $5.7 billion last month. Authorities hope foreign investors and hard currency will return after a years-long exodus, potentially reducing the central bank's need to intervene to keep the lira stable.

Persons: Tayyip Erdogan's, Hafize Gaye Erkan, Erkan, Erdogan, Mehmet Simsek, Piotr Matys, Ezgi Erkoyun, Ali Kucukgocmen, Christina Fincher, Daren Butler Organizations: Reuters Graphics, Wall Street, InTouch, Reuters, Thomson Locations: ISTANBUL, Ankara

☆ Turkish central bank to hike rates sharply in post-election pivot
▼ + stars: | 2023-06-21 | by ( Ali Kucukgocmen | ) www.reuters.com time to read: +4 min

But the level remains uncertain as the central bank has not given any signals as to its next steps, including the size or pace of potential hikes. Some economists have expressed doubt about Erdogan's commitment to abandoning his unorthodox policy of low rates, which led the central bank to slash its policy rate from 19% in 2021 to 8.5% currently. The median estimate for the policy rate at end-2023 was 30%, with forecasts ranging from 18% to 35%. He named Naci Agbal as central bank governor in Nov. 2020 but, after some sharp rate hikes, replaced him less than five months later. The central bank is scheduled to announce its rate decision at 1100 GMT on Thursday.

Persons: Murad Sezer, Tayyip Erdogan, Hafize Gaye Erkan, Malek Drimal, Erdogan, Mehmet Simsek, Moody's, Naci, Simsek, Ali Kucukgocmen, Marc Jones, Jonathan Spicer, Daren Butler, Christina Fincher Organizations: REUTERS, Societe Generale, stoke, Thomson Locations: Istanbul, Turkey, ISTANBUL

☆ Turkish lira teeters near record low as Erdogan secures victory
▼ + stars: | 2023-05-29 | by ( ) www.reuters.com time to read: +3 min

[1/2] A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Turkey November 23, 2021. REUTERS/Murad Sezer/IllustrationLONDON, May 29 (Reuters) - Turkey's lira wobbled near record lows against the dollar as President Tayyip Erdogan secured victory in the country's presidential election on Sunday, extending his increasingly authoritarian rule into a third decade. The currency was at 20.05 to the dollar during Asian hours, just shy of the 20.06 record low hit on Friday. "Only the most optimistic would hope that Erdogan now feels sufficiently secure politically to revert to orthodox economic policy." "Erdogan is unlikely to embrace an outright economic orthodox approach," Wolfango Piccoli, co-president at advisory firm Teneo said in emailed comments.

☆ Turkish lira hits record low, stocks gain after Erdogan secures re-election
▼ + stars: | 2023-05-29 | by ( Canan Sevgili Libgeorge | Canan Sevgili | ) www.reuters.com time to read: +3 min

[1/2] A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Turkey November 23, 2021. REUTERS/Murad Sezer/IllustrationLONDON, May 29 (Reuters) - Turkey's lira hit fresh record lows against the dollar on Monday, though stocks rallied, after President Tayyip Erdogan secured victory in Sunday's presidential election, extending his increasingly authoritarian rule into a third decade. The lira weakened to 20.077 to the dollar, breaking through the previous record low touched on Friday. The share of foreign asset managers holding Turkish stocks has dwindled in recent years and the market is chiefly driven by local investors. The nation's dollar bonds slipped to their lowest in at least six months last week, while CDS rose to a seven-month high.

It reinforced Erdogan's image of invincibility in the deeply divided NATO-member country, whose foreign, economic and security policy he has redrawn. Pro-government newspapers, part of an overwhelmingly pro-Erdogan media landscape that buoyed his election campaign in the nation of 85 million people, cheered his victory. Erdogan said inflation, which hit a 24-year peak of 85% last year before easing, is Turkey's most urgent issue. Turkey's main pro-Kurdish party, parliament's third largest, was among the opposition parties opposed to Erdogan and is accused of links to Kurdish militants, which it denies. Erdogan, head of the Islamist-rooted AK Party, appealed to voters with nationalist and conservative rhetoric in a divisive campaign that deflected attention from Turkey's economic problems.

☆ Turkey election runoff 2023: what you need to know
▼ + stars: | 2023-05-28 | by ( ) www.reuters.com time to read: +6 min

[1/2] Women display flags with images of Turkish President Tayyip Erdogan next to an election campaign point, ahead of the May 28 presidential runoff vote, in Istanbul, Turkey May 25, 2023. Here is a guide to the runoff, the two candidates and the key issues as well as details on how the May 14 parliamentary election unfolded:PRESIDENTIAL VOTETurks will be electing a president for a five-year term. As president, Erdogan sets policy on Turkey's economy, security, domestic and international affairs. The ZP received 2.2% of votes in the parliamentary election. On foreign affairs, under Erdogan, Turkey has flexed military power in the Middle East and beyond, forged closer ties with Russia, and seen relations with the European Union and United States become increasingly strained.

[1/3] A child walks at a polling station while people attend voting during the second round of the presidential election in Istanbul, Turkey May 28, 2023. REUTERS/Hannah McKayANKARA/ISTANBUL, May 28 (Reuters) - Here are some views from Turkish citizens as the country voted on Sunday in an election runoff that may extend President Tayyip Erdogan's rule into a third decade or see a transfer of power to his rival Kemal Kilicdaroglu. Nobody can deny this," said housewife Songul Aslan, 45, after voting for Erdogan. In Diyarbakir, largest city in the mainly Kurdish southeast:"In the first round I voted for Kilicdaroglu for the presidency. Change is essential to overcome the economic crisis and problems that Turkey faces, so I voted for Kilicdaroglu again.

☆ Turkish lira slips as Erdogan claims victory
▼ + stars: | 2023-05-28 | by ( ) www.reuters.com time to read: +1 min

[1/2] A U.S. one dollar banknote is seen next to Turkish lira banknotes in this illustration taken in Istanbul, Turkey November 23, 2021. REUTERS/Murad Sezer/IllustrationLONDON, May 28 (Reuters) - Turkey's lira slipped towards a fresh record low against the dollar as President Tayyip Erdogan claimed victory in the country's presidential election on Sunday, a win that would steer his increasingly authoritarian rule into a third decade. The currency opened at 20.05 to the dollar as the new trading week got underway, not far off the 20.06 record low hit on Friday. Trading is expected to be thin on Monday, with many markets in Europe, as well as the United States closed for holidays. Reporting by Karin Strohecker and Ezgi Erkoyun, editing by Alexander Smith and Sharon SingletonOur Standards: The Thomson Reuters Trust Principles.

[1/2] An election campaign billboard of Kemal Kilicdaroglu, presidential candidate of Turkey's main opposition alliance, with a slogan that reads "Syrians will go! ", is pictured, ahead of the May 28 presidential runoff vote, in Istanbul, Turkey, May 25, 2023. "Most Syrians now feel as if the course of their entire lives depends on the results of the elections," he lamented. Like other regional leaders, Erdogan is also mending fences with Assad, raising the possibility of a rapprochement that could worry many Syrians in Turkey. He recounted an incident when a friend was robbed but feared he would be assaulted if he went to the police to illustrate the precarious position many Syrians feel themselves to be in in Turkey.

"The winner has undoubtedly been our country," Erdogan said in a speech to cheering supporters at the headquarters of his ruling Islamist-rooted AK Party in the capital Ankara overnight. Going into the election, the opposition had sensed its best chance yet of unseating Erdogan, encouraged by polls showing him trailing his main challenger Kemal Kilicdaroglu. But the results suggested Erdogan and his AK Party had been able to rally conservative voters despite a cost-of-living crisis. [1/4] Supporters of Turkish President Tayyip Erdogan and AK Party (AKP) gather on election night, in Istanbul, Turkey May 15, 2023. "During the campaign period ahead of the runoff, President Erdogan is likely to emphasise stability as he already retains the majority in the parliament," Dalay said.

☆ What the voters say as Turkey votes in landmark elections
▼ + stars: | 2023-05-14 | by ( Deniz Uyar | Oriana Boselli | ) www.reuters.com time to read: +4 min

ISTANBUL/ANTAKYA, Turkey, May 14 (Reuters) - Here are some views from Turkish citizens as their country voted on Sunday in elections that could extend President Tayyip Erdogan's rule into a third decade or see a transfer of power to his main rival Kemal Kilicdaroglu. I don't think it will go to a runoff," said school staff member Hasibe, 40, in the school where Erdogan voted on the Asian side of the city. I chose democracy and I hope that my country chooses democracy. "Of course, there are good things (Erdogan) did, but lately, they started to look down on and insult the nation. As you can see, even in elections, votes are being cast in ballot boxes outside," said school teacher Behzat Oz.

One presidential candidate from a small party, Muharrem Ince, withdrew on Thursday citing a faked "character assassination" carried out online. "We find it unacceptable for another country to interfere in Turkey's election process in favour of a political party. [1/4] FILE PHOTO-Kemal Kilicdaroglu, presidential candidate of Turkey's main opposition alliance, greets his supporters during a rally ahead of the May 14 presidential and parliamentary elections, in Tekirdag, Turkey April 27, 2023. Kilicdaroglu said a fundamental problem of Turkey's foreign policy in Erdogan's AK Party (AKP) tenure was the exclusion of the foreign ministry from the policy-making process. Turkey, Kilicdaroglu said, will pursue a peace-oriented foreign policy that prioritises its national interest and acts in line with the modern world.

☆ Kemal Dervis, Who Eased Turkey’s Economic Crisis, Dies at 74
▼ + stars: | 2023-05-11 | by ( Neil Genzlinger | ) www.nytimes.com time to read: +1 min

Kemal Dervis, an economist who was instrumental in leading his native Turkey out of economic crisis early in this century, and who later became the first person to lead the United Nations Development Program from a country that had received developmental aid from the program, died on Sunday in Bethesda, Md. The Brookings Institution, where Mr. Dervis had been the director and vice president of the global economy and development program and was a nonresident distinguished fellow, confirmed his death. Turkey’s state-run Anadolu news agency said he died of an unspecified illness. Mr. Dervis had been working in various posts for the World Bank for two decades when, in early 2001, prices in Turkey began skyrocketing and the currency, the lira, plunged in value. The meltdown was fast-moving, and Mr. Dervis, at the time a vice president of the World Bank, was seen as a savior.

Under the terms of the agreement, up to $4 billion in Turkish energy payments to Russia may be postponed until next year, both sources told Reuters under condition of anonymity. Turkey, which is preparing for elections on Sunday, depends heavily on energy imports and Russia is its largest supplier. The source said Turkey could push back further such payments in the coming months depending on the course of energy prices. The Russian and Turkish energy ministries, and their respective energy companies Gazprom and Botas, have not responded to requests for comment on the issue. Turkish Energy Minister Fatih Donmez said last week that Turkey and Moscow agreed a deal allowing Ankara to defer energy payments up to a certain amount, but did not give details.

Sources said some factoring companies were giving loans with a 70% interest rate, up from 30% in February. For the first time, the rates offered by banks and factoring firms are aligned," he said. Corporates which are not able to get loans from banks are now borrowing from factoring firms with high level of interest, said another banking source. The source said factoring companies and banks can use a funding facility at the Istanbul Settlement and Custody Bank (Takasbank) and these loans' interest rates are around 45%. "Some brokerage houses either trimmed down the leverage ratio for their clients or closed their positions due to the increasing interest rates at Takasbank.

☆ Turkey's Baykar plans production of new air combat drone next year
▼ + stars: | 2023-04-29 | by ( ) www.reuters.com time to read: +2 min

ISTANBUL, April 29 (Reuters) - Turkish defence firm Baykar aims to begin production of its new unmanned combat aerial vehicle (UCAV) next year which is already attracting international interest, its chairman Selcuk Bayraktar said. Named Kizilelma, the drone expands the company's product range from slow, ground attack drones to fast and agile autonomous ones that work alongside fighter jets. "It is designed to be a highly autonomous, under human purview of course, air-to-air combat vehicle" said Bayraktar, who led the design of the 15-meter-long jet-powered UCAV. Baykar plans to begin production in small quantities next year. Kizilelma made its first flight in December and began formation flight tests with Baykar's other drones this month.

April 24 (Reuters) - Iraq's northern oil exports showed few concrete signs of an imminent restart after a month of standstill, as aspects of an agreement between Baghdad and the Kurdistan Regional Government (KRG) have yet to be resolved, according to four sources. Baghdad and Erbil, the capital of Iraq's semi-autonomous Kurdistan region, signed a temporary agreement on April 4 to restart northern oil exports. The KRG and Iraq's oil ministry did not respond to requests for comment. Iraq's lack of willingness to discuss these issues has frustrated Turkey, according to one source. Fields which are still running include Khurmala, which has reduced output from around 135,000 bpd to 100,000 bpd, according to a source familiar with field operations.

☆ Supreme Court Widens Path to U.S. Charges Against Foreign State-Owned Firms
▼ + stars: | 2023-04-20 | by ( Jan Wolfe | ) www.wsj.com time to read: 1 min

Turkey’s Halkbank argued that allowing U.S. criminal proceedings against companies owned by foreign states would negatively affect American national security. Photo: MURAD SEZER/REUTERSWASHINGTON—The Supreme Court made it easier for the Justice Department to charge corporations owned by foreign states, saying a federal law from 1976 doesn’t shield Turkey’s Halkbank from high-profile money-laundering charges. In a decision Wednesday, the justices said the Foreign Sovereign Immunities Act of 1976 doesn’t protect such entities from criminal charges.

Fear that another tragedy could strike forced her to leave Istanbul because she couldn't afford a new apartment there, she said. However, seismologists said the February disaster has not changed the likelihood of an Istanbul quake, with the two areas on different faultlines. Any disaster in Istanbul would stagger Turkey's economy given the broader Marmara region accounts for some 41% of national GDP. Some 1.5 million homes are considered at risk in the city, Urban Planning Minister Murat Kurum said this week. According to official data, an average of more than three people live in each household, meaning up to 5 million live in these properties.

LONDON/BAGHDAD, April 1 (Reuters) - Iraq's federal government and the Kurdistan Regional Government (KRG) are close to striking a deal aimed at resuming northern oil exports, four sources familiar with the discussions told Reuters on Saturday. Revenues will be deposited in an account managed by the MNR and supervised by Baghdad, the KRG official said. Iraq's oil ministry spokesman could not immediately be reached outside regular business hours. Baghdad and the KRG have agreed to continue meetings following the resumption of oil exports to find solutions to other lingering problems. "[These include] the contracts of the foreign companies operating in Kurdistan and the Kurdish debts," the senior Iraqi oil official said.

ANKARA, March 28 (Reuters) - Turkey's Energy Ministry said on Tuesday that Iraq had been ordered by the International Chamber of Commerce (ICC) to pay compensation to Ankara in a longstanding arbitration case related to oil exports from northern Iraq via Turkey. The Turkish energy ministry statement was released after Iraq's oil ministry said on Saturday the ICC had ruled in its favour in the case. The Turkish statement said the ICC had recognised a majority of Turkey's demands, without saying how much compensation Iraq had been ordered to pay. "(The ICC) ordered Iraq to pay a compensation to Turkey," the ministry said, without revealing the amount of compensation. "This case is in fact a reflection of disagreement between Iraq's central government and Iraq's Kurdish Regional Administration," the Turkish ministry said.

REUTERS/Murad Sezer/IllustrationORLANDO, Florida, March 27 (Reuters) - The most extraordinary outcome of the March banking shock would be if the problem dissipated quickly. Many people hope the crisis of confidence infecting global banking this month can be repelled almost as quickly as it appeared. SAVINGS AND LOANS DEBACLEThe easy comparison for any banking or market turmoil is the GFC of 2007-08. But crises don't have to be equal to or worse than the world's most calamitous financial disaster in a century to be extremely damaging. But other banking crises follow the same playbook, even if their outcomes are not as extreme.

☆ Turkey's Hepsiburada to prioritise profitability, customer retention -CEO
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +2 min

March 23 (Reuters) - Turkey's only listed e-commerce platform Hepsiburada (HEPS.O) will prioritise profitability over rapid growth and step up efforts to retain customers who are being hit by soaring inflation. "My mandate here is to improve profitability", new Hepsiburada CEO Nilhan Onal Gokcetekin told reporters late on Wednesday. Gokcetekin said the path to improved profitability began with retaining customers through a company loyalty programme. However, Hepsiburada's net loss widened to 2.9 billion lira ($152 million) in 2022 from 2 billion lira a year earlier, while earnings before interest, tax, depreciation and amortisation (EBITDA) narrowed to a loss of 2.6 billion from a 3.7 billion loss in 2021. That compares with a 7 million lira EBITDA loss in the last quarter of 2022.

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