Turkey’s current account deficits are a perennial concern for investors, because their financing has been a major headache since 2018, when the country reverted to unorthodox policies aiming at maxing out on growth with negative real rates. Turkey also mistreated foreign financial investors who left in droves, forcing Central Bank to finance external deficits from its FX reserves. The exodus by foreign financial investors and reluctance by global banks to lend to Turkey explains the eternal depreciation of TL and sporadic currency mayhem.
Thanks to orthodox policies implemented by economy czar Mehmet Simsek and CB governor Gaye Erkan, foreign financing is becoming easier to access, as attested by three major financing deals in the short span of a week:
AA: Turkey obtains major FX financing to ease current account financing woes
World Bank’s private-sector arm IFC announced Friday a financing package of up to $530 million to support micro and smaller businesses in Türkiye’s earthquake-hit southern region.
International Finance Corporation (IFC) funding will be channeled through five private lenders of Türkiye, namely Akbank ($71 million), DenizBank ($119.5 million), QNB Finansbank ($109.5 million), Is Bankasi – ($150 million) and Yapi Kredi ($80 million).
Some $220 million of the fund was mobilized from international financial and development institutions.
Two powerful earthquakes hit 11 provinces in southern Türkiye on Feb. 6, causing extensive damage and killing and injuring tens of thousands of people.
The quake-hit region was home to more than 470,000 private enterprises, of which 99% are micro, small, and medium enterprises (MSMEs), the IFC said in a statement.
“The financing package aims to keep these vulnerable but otherwise viable enterprises afloat, as part of our strong commitment to support the economic recovery and foster sustainable and inclusive growth in Türkiye,” said Wiebke Schloemer, IFC director for Türkiye and Central Asia.
Türkiye is currently the IFC’s third-largest investment destination globally, with a committed portfolio of close to $4.9 billion as of November 2023.
Turkey’s Ziraat signs 1.75 bln euro loan deal with Deutsche Bank
State lender Ziraat Bank said on Friday it signed a 1.75 billion euro ($1.9 billion) loan deal with Deutsche Bank DBKGn.DE for up to five years, reflecting what it called the Turkish economy’s more positive trajectory.
Turkey’s largest lender by both assets and loans, Ziraat said the deal would help it continue to support exporters and other sectors that are a priority for economic development.
German lender Deutsche did not immediately comment.
İs Bank scores 380mn USD
Türkiye İş Bankası signed a loan agreement totaling 67 million USD and 75 million Euros with the International Finance Corporation (IFC), PROPARCO, the private sector representative of the French Development Agency, and the Green for Growth Fund (GGF). The bank also completed a sustainability-related treasury financing transaction worth USD 230 million.
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