Posted on 06/14/2018 9:03:23 PM PDT by Texas Fossil
What happens next may look like Greece during its financial collapse – meaning Turkey’s economy could shrink by 10%-20%
The Turkish central bank managed to halt the free-fall of the country’s currency last week with a sharp rise in interest rates. But the move failed to stop the free-fall of Turkey’s equity market and – far more dangerous – the collapse of the credit quality of Turkey’s banks. Only last October, the euro-denominated 10-year bond of Turkey’s largest private lender, Garanti Bank, yielded just 3%. Now it yields more than 7%, and the dollar value of the bond has fallen from over 120 euros to around 80 euros.
Turkey’s Istanbul 30 stock market index meanwhile has fallen by 35% in US dollar terms since August 29, 2017. Its most vulnerable lender, Halk Bank, lost 63% of its US dollar value in the same period and now trades at 40% of book value.
Turkey’s banks are shut out of world capital markets, and the country is hard put to raise the US$50 billion in new hard currency it needs to finance a current account deficit running at around 6% of GDP. Turkish businesses have about US$300 billion in foreign currency debt, and the cost of servicing it has nearly doubled in local-currency terms due to the lira’s depreciation since 2015. The banks will have trouble rolling over their existing short-term borrowings in hard currency, and trouble collecting loan payments from customers crushed by the collapse of the lira.
(Excerpt) Read more at atimes.com ...
And June 24th is Turkey's election day.
Good!
You reap what you sow...the question is how honest the elections will be.
And also worth noting: both neighboring ARMENIA and GEORGIA have their leadership peacefully ousted. Armenia’s last month in what was essentially a full on bloodless coup/revolution. And Georgia in the past week! The PM resigned “after protests and party infighting.”
Let us pray that both Adolf Erdogan and Mitt Romney are defeated on June 24th
“June 24th is Turkey’s election day.”
This impending economic crisis is probably why Erdogan called a snap election - trying to secure his power before the economy crashes.
Looks like they are heading for a painful downturn, and things are already breaking bad.
It is Erdogan’s fault.
Thanks Texas Fossil, but uh-oh! You know what this means?!? For the 400th or so time, someone will claim that the result will be that Turkey and (fill in the blank with some other countries, usually Iran, China, Russia, Podunkistan, etc) will DITCH THE US DOLLAR as a reserve currency, which will DESTROY THE US ECONOMY. /snark
Here are some pertinent keywords, be sure to imagine a rimshot as you read each one.
Indeed, it is Erdogan’s fault. Totally.
Dual June 24th defeat BUMP
Thanks for that perspective, I did not know about either of those.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.