The Chart Speaks For Itself
Depending on external finance has been the case for almost any emerging market, but in Turkey it is life-sustaining given the country’s external balance profile, which has always had a bad title due to being an energy importer and demographics that fuel consumption.
Speaking of external balance, Turkey is also known for its banks’ ability to provide foreign borrowings as syndication loans for a while has been the most important source for banks to finance the growth. To cut a long...
Fragility Ahead for Turkish Lira?
Turkish lira has been particularly weak as of the beginning of October. As prospects of a Federal Reserve rate in December hike boosted again, many emerging market currencies is doomed to be weak in the remainder of this year. However, Turkish lira has seemed to be high-beta asset class in EMFX space so far.
Looking at the domestic factors that resulted in a weaker lira, Moody’s downgrade that deprived Turkey of IG is the primary reason in...
Economic Update: 1Q15 GDP & April Current Account
Turkey GDP grew by more than expected (2.3% versus 1.6%) in the first three months of 2015, data from Turkstats showed on Wednesday. Despite the fact that the reported figure signaled a below par growth in the country, we saw the pressure on Turkish assets easing for a while following the economic data. However, a rethinking about the country’s growth regime is needed given that for the last thirteen quarters it has been posting growth numbers...