The European Bank for Reconstruction and Development (EBRD) believes on the long-term development of Turkey, according to the bank’s managing director in Turkey.
Noting that the EBRD has been operating in Turkey since 2009, Arvid Tuerkner said Turkish market is the "largest investment envelope.”
"Since 2009, Turkey has really been a success story for the EBRD," Tuerkner said.
He stressed that 96 percent of the bank’s investments in Turkey were made in private sector.
Turkey central bank hikes rates, boosts lira
Turkish Central Bank on Thursday hiked its one-week repo rate by 625 base points. In a statement, the bank's Monetary Policy Committee said the policy rate was increased to 24 percent, up from 17.75 percent. According to Anadolu Agency's survey on Monday, a group of 17 economists expected a rise in one-week repo rate with a median of 425 base points, i.e. 4.25 percentage points.The next two Monetary Policy Committee meetings are to be held on Oct. 25, and Dec. 13.Erdoğan vows to take more steps to stop exchange rate fluctuation"Recently released data indicates a more significant rebalancing trend in the economic activity," the bank said."External demand maintains its strength, while slowdown in domestic demand accelerates," it added.On Monday, the country's statistical authority TurkStat announced that Turkey's economy grew by 5.2 percent in the second quarter of this year compared with the same period last year.The Turkish economy's growth rates were 11.5 percent in the third quarter last year, 7.3 percent in the last quarter of 2017, and 7.3 percent in the first quarter of this year.Turkish lira surges against US dollar"Recent developments regarding the inflation outlook point to significant risks to price stability," the bank said, noting that price increases have shown a generalized pattern across subsectors, reflecting the movements in exchange rates.The U.S. dollar/Turkish lira exchange rate saw harsh fluctuations as lira lost around 40 percent against the dollar since the beginning of this year.As of 3 p.m. (1200GMT) Thursday, the exchange rate hovered around 6.20. Last year, the average USD/TRY exchange rate was 3.65 while it was 3.02 on average in 2016."Deterioration in the pricing behavior continues to pose upside risks on the inflation outlook, despite weaker domestic demand conditions," the bank said."Accordingly, the Committee has decided to implement a strong monetary tightening to support price stability," it added.According to TurkStat, Turkey's annual inflation was 17.90 percent in August, up from July's figure of 15.85 percent.Over the past five years, the annual inflation saw its lowest level at 6.13 percent in April 2013, while the figure reached its highest level last month.The bank also noted that it will continue to use all available instruments to the price stability."Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement," it said.In order to achieve targets, the bank added that it will closely monitor a wide range of variables -- inflation expectations, pricing behavior, lagged impact of recent monetary policy decisions, contribution of fiscal policy to rebalancing process, and other factors.On Thursday, the bank also announced that the Central Bank funding -- currently provided through overnight lending -- will be provided via one-week repo auctions starting from Sept.14."One-week transition period has been envisaged for providing all of the funding via one-week auctions," it said.In May, the bank decided to complete a simplification process for the operational framework of its monetary policy, and determined one-week repo rate as its policy rate.
Tuerkner said the bank has a broad investment profile, with a special focus on infrastructure and renewable energy projects, as well as corporate companies involved in producing and exporting of products.
"We have invested in total close to €11 billion (approximately $12.8 billion) into the projects in Turkey since 2009," he added.
Stating that the EBRD is a demand-driven organization, and considering the "investment appetite" in Turkey, Tuerkner said the bank is always ready to finance the viable projects.
Erdoğan vows to take more steps to stop exchange rate fluctuation
Turkish President Recep Tayyip Erdoğan vowed on Thursday to take additional steps to prevent fluctuation in foreign exchange rates against the Turkish lira.The Turkish president stressed that the Central Bank is independent, reiterating his commitment to taking appropriate decisions to steer Turkey out of the current situation.“We’re moving from a consumer economy into a manufacturing one,” said Erdoğan during his speech in Ankara.“We are struggling to solve all the issues affecting our economy without going beyond the boundaries of the free market system," said Erdoğan as he pointed that Turkey embraced free market principles under the ruling Justice and Development (AK) Party.Turkish lira rallies at two-week high against dollarTurkey to use lira in property purchases, sales, rentsErdoğan signed a decree early Thursday that requires using the lira for buying, selling and renting of real estate and leasing of vehicles, according to presidential sources.The Central Bank is expected to raise interest rates. On Sept. 3, the bank announced that it will continue to use all available instruments in pursuit of the price stability objective.The lira has lost more than 40 percent of its value against the dollar this year over a diplomatic spat between Ankara and Washington, but gained ground against the U.S. dollar on Wednesday ahead of Thursday's monetary policy committee meeting of the Turkish Central Bank.Turkey and the U.S. are currently experiencing rocky relations following Washington’s imposition of sanctions on two government ministers for not releasing American pastor Andrew Brunson, who faces terrorism-related charges in Turkey.On Aug. 10, President Donald Trump ramped up his attack on Turkey by doubling U.S. tariffs on Turkish aluminum and steel imports.Turkey increased tariffs on several U.S.-origin products, including alcohol and tobacco products and cars in retaliation.Turkey to use lira in property purchases, sales, rents
He also highlighted the role of Turkish banks and financial institutions on reaching to SMEs (small and medium-sized enterprises) and women in business for financing their projects.
Touching the recent foreign exchange market fluctuations in the country, Tuerkner said that the EBRD believes in Turkish market, and regardless of difficult circumstances, the bank continues to do the business in Turkey.
"Current period is a difficult one for Turkey, it is a very volatile environment. Regardless, EBRD continues to remain open for business," he noted.
Turkish lira rallies at two-week high against dollar
The U.S. dollar/Turkish Lira exchange rate saw its lowest level in the last two weeks, while Turkey's Borsa Istanbul closed the day at 92,227.37 points with a 0.18 percent decrease on Wednesday.Borsa Istanbul's BIST 100 index ended the day with a 161.74-point decrease from Tuesday's close of 92,389.11 points, while it opened the day at 92,836.31 points, up 0.48 percent. Trade volume was around 7 billion Turkish liras ($1.1 billion) on Wednesday.The USD/TRY exchange rate dropped by 1.9 percent to 6.3530 as of 5 p.m. local time (1400GMT) Wednesday, compared with 6.4740 at Tuesday's close. The rate was 6.7840 at the end of August.The euro/Lira exchange rate also fell by 1.6 percent to 7.3810 by market close, versus 7.4980 at the previous close, while the British pound/Lira exchange rate reached 8.2820 Turkish liras, compared with 8.4240 at Tuesday's close.In Borsa Istanbul's Precious Metals and Diamond Markets, one ounce of gold traded for $1,194.00 as of 5.30 p.m. local time (1430GMT) Wednesday, compared with $1,193.70 at the previous close.As of 6 p.m. local time (1500GMT), the price of Brent oil rose rapidly to $79.94 per barrel at the day's closing, compared with $78.59 at the end of Tuesday.
The EBRD has provided a loan of €80 million (nearly $94 million) for the construction of a new 7.2-kilometer (4.4-mile) metro line in Turkey's Aegean province of Izmir, the bank said in a statement on Thursday.
The bank previously extended more than €55 million (more than $64 million) financing for new vehicles for the Izmir metro system and new car ferries to support an environmentally friendly alternative to the city's busy roads.
In 2017 alone, the EBRD invested €1.6 billion (some $1.8 billion) in 51 projects in the country -- nearly a third of this financing was provided in Turkish Lira.
Since 2009, the EBRD has invested nearly €11 billion (approximately $13 billion) in Turkey -- a top destination for the bank’s finance.
Turkey, UK agree on enhancing economic, commercial ties
Turkish and British trade ministers signed MoU for the 6th Turkey-UK Joint Economic and Trade Commission (JETCO) in London on Wednesday.The MoU aimed to enhance economic and commercial ties between the two countries.Speaking at Turkey-UK business forum after signing ceremony, Turkish Trade Minister Ruhsar Pekcan said both countries expected to further develop cooperation post-Brexit."We plan to include services, agricultural products trade, e-trade, and public purchasing to make the agreement more comprehensive," Pekcan said.Turkey, Kazakhstan target $10B trade volumeShe invited British firms to invest in high-technology free-trade zones in Turkey."We will provide special incentives to technology-based projects and companies which operate in IT, informatics and software sectors," Pekcan said.Liam Fox, British secretary of state for international trade, highlighted the importance of Turkey's geopolitical position.He stated that JETCO was a start of a richer relation between the two countries and added that it aimed to increase diversity in trade.Turkey to use lira in property purchases, sales, rentsUnderlying the bilateral trade volume target of $20 billion, Fox said the target was set realistically.He noted that more than 200 prominent Turkish companies operated in the U.K.Fox added that the number of British tourists visiting Turkey was expected to reach 3 million in 2018, up from 1.6 million last year.He also noted that the U.K. supports Istanbul to become a financial center including cooperation with the City of London.
Turkey to use lira in property purchases, sales, rents
President Recep Tayyip Erdoğan signed a decree early Thursday that requires using the lira for buying, selling and renting of real estate and leasing of vehicles, according to presidential sourcesThe decree was published in the Official Gazette.Purchase, sales and rental contracts of moveable and immovable properties and vehicle leasing made in foreign currencies will be converted into Turkish lira within 30 days, according to the decree.It added that in the current contracts, the agreed prices in foreign currencies will be redefined as Turkish lira within one month and the terms of the decree will be executed by the Finance and Treasury Ministry.On Aug. 29, Treasury and Finance Minister Berat Albayrak said the government would take steps to prevent foreign currencies from being used for real estate and shopping mall store rent and sales.Trumpian chaos and Turkish-American relations'Turkey to no longer send students to study in US'Turkish lira gains value against US dollarTurkish Treasury borrows $515M through auction