Thursday, June 16, 2011
ISTANBUL- Hürriyet Daily News
 Vedat Akgiray, the chief of the Capital Markets Board of Turkey. AA photo |
Comparing Turkey’s economic outlook and performance throughout the global economic crisis, the nation’s economy has already deserved a rate increase from the international rating agencies, according to Vedat Akgiray, the chief of the Capital Markets Board of Turkey.
“As the countries around Turkey are seeing rate decreases by the international rating agencies, Turkey’s ratings remain the same, which is also a sign for the country’s bright future,” Akgiray told the Hürriyet Daily News on the sidelines of the Banking Business Forum 2011 organized by Banking Association for Central and Eastern Europe, or BACEE.
Speaking few days after Turkey’s general elections that brought 49.9 percent of the votes and a polished victory to the ruling Justice and Development Party, or AKP, Akgiray said, “there is not much excuse that the rating agencies could bring up now, it is time to increase the rates.”
Moody’s ranks Turkey at Ba2, two levels below investment grade, with a positive outlook. Standard & Poor’s rates the country an equivalent BB, also with a positive outlook, and Fitch Ratings has a BB+ ranking, one step below investment grade.
“The control over the credit growth has already helped Turkey to slow down the growth of the current account deficit,” said Akgiray noting that “we will see the benefits of curbing the loan growth in the markets, mainly in third quarter of the year.” Year to date total loan growth reached 13.9 percent as of June 3, implying a 33 percent growth rate for the year according to official data.
Current account gap
As Turkish Central Bank has raised reserve requirements for banks by 10 percent since December to curb the lending, nearly 50 billion Turkish Liras has been mopped up by the Central Bank, issuing no interest rate in return. Akgiray said, “The banks’ executives and chief economists have started to appreciate the measures taken against the loan growth to stabilize the economy.” Responding to the criticisms of “though measures”, he said that “there will be always some people complaining about the reserve rate requirement.”
Country’s chronic problem current-account deficit that widened to $7.7 billion in April from $4.4 billion a year earlier, according to Turkish Statistics Institute, or Turk STATS. It was the second- biggest gap since records began in 1984, after the revised $9.7 billion record that was posted for March.
“As the countries around Turkey are seeing rate decreases by the international rating agencies, Turkey’s ratings remain the same, which is also a sign for the country’s bright future,” Akgiray told the Hürriyet Daily News on the sidelines of the Banking Business Forum 2011 organized by Banking Association for Central and Eastern Europe, or BACEE.
Speaking few days after Turkey’s general elections that brought 49.9 percent of the votes and a polished victory to the ruling Justice and Development Party, or AKP, Akgiray said, “there is not much excuse that the rating agencies could bring up now, it is time to increase the rates.”
Moody’s ranks Turkey at Ba2, two levels below investment grade, with a positive outlook. Standard & Poor’s rates the country an equivalent BB, also with a positive outlook, and Fitch Ratings has a BB+ ranking, one step below investment grade.
“The control over the credit growth has already helped Turkey to slow down the growth of the current account deficit,” said Akgiray noting that “we will see the benefits of curbing the loan growth in the markets, mainly in third quarter of the year.” Year to date total loan growth reached 13.9 percent as of June 3, implying a 33 percent growth rate for the year according to official data.
Current account gap
As Turkish Central Bank has raised reserve requirements for banks by 10 percent since December to curb the lending, nearly 50 billion Turkish Liras has been mopped up by the Central Bank, issuing no interest rate in return. Akgiray said, “The banks’ executives and chief economists have started to appreciate the measures taken against the loan growth to stabilize the economy.” Responding to the criticisms of “though measures”, he said that “there will be always some people complaining about the reserve rate requirement.”
Country’s chronic problem current-account deficit that widened to $7.7 billion in April from $4.4 billion a year earlier, according to Turkish Statistics Institute, or Turk STATS. It was the second- biggest gap since records began in 1984, after the revised $9.7 billion record that was posted for March.
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