Government delivering promised reforms: Albayrak

Government delivering promised reforms: Albayrak

ANKARA
Government delivering promised reforms: Albayrak

Turkey is carrying out policies pledged in the reform package, the country’s Treasury and Finance Minister Berat Albayrak said late April 22, after his ministry announced that government debt securities worth 3.7 billion euros ($4.16 billion) will be issued to support the banking sector.

“We will continue to work determinedly to move our economy to the desired level,” Albayrak wrote on Twitter.

According to the Treasury’s statement, released on April 22, a total of 3.3 billion euros ($3.7 billion) of the securities will consist of five-year zero-coupon bonds - with a 4.61 percent annual interest rate - for state-run lenders including Ziraat, Halkbank, Vakıflar, Eximbank and Development and Investment Bank.

The Treasury will also issue government debt securities in the amount of 400 million euros ($450 million) for state-run participation banks - interest-free five-year bonds. Those financial institutions are Ziraat Participation, Vakıf Participation and Emlak Participation.

The debt securities will be issued to the Market Stability and Balance Fund (PIDF) owned by the Wealth Fund, the Treasury said in the statement.

It added that the Market Stability and Balance Fund then will sell those securities to state lenders and buy banks’ perpetual bonds or provide loans to strengthen their capital.

With this move, Turkey is working to strengthen state lenders’ funds.

The action was announced in the country’s economic reform package released on April 10.

“Turkey will focus on structural reforms to achieve the target of a greater and more powerful economy,” Albayrak said when he unveiled the reform package.

“Strengthening state-run lenders’ capital structure will be our first step. Efforts in coordination with the banking watchdog and banking association are continuing to support private lenders’ capital structure,” he added.

In a separate tweet on April 22, Albayrak also said the policies implemented by the government are boosting consumer confidence, citing a recent official data which showed consumer sentiment increased nearly 7 percent in April.

“The increase [in consumer confidence] which started in February is continuing. We will further strengthen confidence in every field with the structural transformation,” he added.

The Turkish Statistics Institute (TÜİK) reported on April 22 that the consumer confidence index rose by 6.9 percent on a monthly basis to stand at 63.5 in April.

In 2018, the index value hovered between 72.7 and 57.6 - the highest posted in July and the lowest in October.

In the month, the index for general economic situation expectations stood at 82.4, surging 4.8 percent from 78.6 in March while the financial situation expectation of household index increased by 5.1 percent to 82.2.

The sub-index measuring the probability of buying a house soared as much as 43 percent on a monthly basis in April after plunging 14 percent in the previous month.