Turkey’s financial stability body discusses forex risks

Turkey’s financial stability body discusses forex risks

ANKARA - Anadolu Agency
Turkey’s financial stability body discusses forex risks

AFP photo

At its latest meeting the Financial Stability Committee discussed problems in the private sector’s management of foreign exchange risks, Turkey’s Treasury stated on Dec. 29.      

“The effects of recent global and local developments on domestic financial markets, as well as the outlook, were discussed at the 29th meeting of the Financial Stability Committee, under the chairmanship of Deputy Prime Minister Mehmet Şimşek,” the Treasury said.     

The Treasury said developments in the Turkish banking system, whose regulatory and supervisory framework is considered equivalent according to the decision adopted by European Commission on Dec. 20, 2016, were assessed.      

“The management of exchange risk of real sector firms was also elaborated. Monitoring frameworks for financial stability were discussed and the auto-enrolment system in the private pension scheme was assessed,” the Treasury added.      

It did not give details on what action Turkey would take against foreign exchange risks.      

On Dec. 27, Şimşek, who helps oversee economic policy, said the country’s Financial Stability Committee would discuss problems in the private sector management of foreign exchange risks.      

The Turkish Lira has declined as much as 16.87 percent against the U.S. dollar in 2016, underlining risks in foreign debt payments in Turkey’s private sector, which is largely dependent on external capital inflow.    
The private sector’s long and short-term external debt stood at $224.4 billion at the end of Oct. 2016, according to the country’s Central Bank.