TR Economy & Updates

[Constan]

TotalEnergies to Invest $27 Billion in Iraq

The French energy giant signed a 25-year deal spanning fossil fuel and renewables.

www.wsj.com

Why we didn't invest in Iraq gas and oil and let France take this opportunity ?

 

[Lool]

TotalEnergies to Invest $27 Billion in Iraq

The French energy giant signed a 25-year deal spanning fossil fuel and renewables.

www.wsj.com

Why we didn't invest in Iraq gas and oil and let France take this opportunity ?

There can be many reasons for that tbh
Some of which may be-
1- just like with the Iraqi airport tender, Turkey was the best candidate; however, France took it because they have connections and what they call a "middleman"
2- France Total may have more experience and may have offered a better deal in the long term (though I doubt it)
3- Political connections, France may have promised iraqi government more political support in the international community or it may have been a method to please the kurds in iraq since the iraqi government is a bit pro-turkey and the kurds which hold major powers and lands in iraq doesnt like that because Erdo is butchering them so they play with france as France is a major Kurdistan supporter

There are many more reasons but these are the ones that immediately came to my mind

 

[Saithan]

Turkey eyes apartment rental companies to rein in price headache

Real estate property rents across Turkey have increased over recent months amid strong demand – an environment that is also said to have paved the way...

www.dailysabah.com

Foreigners with money can afford the houses, but citizens can't. People not wanting to lose money on their investment... It's understandable. If you buy a house for 100.000 TL 10 years ago, the rent equivalent a certain level of PPP would be let's say 3 TL - 1 USD today it would be far less, so they need to hike the rent.

This sinister swirl will just continue, until sale to foreigners are restricted. Selling pasport for money should be stopped as well.

 

[Saithan]

Turkey hikes required reserves ratios for forex liabilities​

BY DAILY SABAH WITH AGENCIES​

ISTANBUL FINANCE
SEP 15, 2021 10:15 AM GMT+3

A logo of the Central Bank of the Republic of Turkey (CBRT) is pictured at the entrance of the bank's headquarters in Ankara, Turkey, April 19, 2015. (Reuters Photo)


Turkey’s central bank raised the required reserves ratio for foreign currency and precious metal deposits by 200 basis points, according to a decision published in the Official Gazette early Wednesday.

The ratio was raised to 23% from 21% for forex deposit accounts and participation funds with a maturity of up to a year, and to 17% from 15% for those with a maturity of a year or longer, the Gazette showed.

The ratio was raised to 24% from 22% for precious metal deposit accounts with a maturity of up to a year, and to 20% from 18% for those with a maturity of a year or longer.

The changes will take effect Sept. 17, the Gazette showed.

Turkey hikes required reserves ratios for forex liabilities

Turkey’s central bank raised the required reserves ratio for foreign currency and precious metal deposits by 200 basis points, according to a decision...

www.dailysabah.com

_______________________________

Building up reserves for an upcoming operation ?

 

[mulj]

Great, one step towards more fair and easier to manage economy

https://twitter.com/i/web/status/1438106430632988673

 

[the]

Seems like AKP/Erdogan is in a fairly tough position.

If Erdogan pressures CBRT to cut interest rates to 'produce' cheap credit - in order to win support, he risks prolonging the effects of inflation, no doubt worsening the situtation, rather than dealing with it now.

If he allows CBRT to raise interest rates, the TL will re-gain some value, eventually leading to a drop in inflation. But this rise in interest rates will likely discourage investment and domestic consumption - leading to lower than expected GDP growth. (Going against his vision of high economic growth)

If he does nothing, the period between now and and election time will most likely be one of stagflation, with inflation still rampant, GDP growth fairly low and unemployment high. Potentially leading to a rise in the support of opposition parties - perhaps even a significant drop in support from his most loyal supporters.

 

[Nilgiri]

Building up reserves for an upcoming operation ?

What do you mean?

 

[Saithan]

What do you mean?

It's unlike RTE and current government to bother with rational fiscal policies, even in the face of inflation as I believe we've seen time and again. Trying to slowly build up reserves doesn't seem rational without sound reforms, which makes me think that government is trying to save up for something. Not necessarily to stabilize the economy, but more for a move they want to make.

 

[Saithan]

Turkey eyes $7.5 bln in property sales to foreigners​

Engin Esen - ISTANBUL​

Expecting a total amount of nearly $7.5 billion in sales to foreigners this year, the Turkish property market ranks among the top 10 in the world, according to an executive of a sectoral association.

“Foreign real estate buyers’ interest in Turkey has soared in the last two years,” said Hakan Bucak, a board member of the Real Estate International Promotion Association (Gigder).

“Turkey attracts huge demand from 80 countries in four continents, particularly Iraq, Iran and Russia. With this performance, we took place among the top 10 countries that made the highest amount of property sales to foreigners in 2020,” he told Daily News.

Bucak, who is also the founder and CEO of Mars Investment, said that Spain, Portugal and Greece ranked atop the list, which also included Canada, the United States, France, the United Kingdom, Italy and Montenegro.

Last year, Turkey raked in nearly $6 billion in more than 40,000 property sales to buyers from other countries, down from around 45,000 in 2019.

While the range is wide, the average price tag of a property to be sold to a customer from abroad is around $150,000.

“We are expecting to finish the year at a level near 50,000 [sales],” Bucak said.

In January-August, house sales to foreigners increased by 47.6 percent compared to the same period of 2020 to reach 30,849, according to data released by the Turkish Statistical Institute (TÜİK) on Sept. 14.

In August alone, 5,866 houses were sold to foreigners, marking a 50.7 percent rise year-on-year.

Istanbul had the lion’s share with 2,729 units sold to foreigners, followed by the Mediterranean province of Antalya (976), the capital Ankara (400), the Mediterranean province of Mersin (242), the Marmara region’s Yalova province, which is famous for its hot springs (233), the Marmara province of Bursa (206), the northwestern province of Sakarya (129), the Aegean province of İzmir (121), the Black Sea province of Samsun (102) and the southwestern province of Muğla (98).

“There’s a misperception that demand mainly comes from the Arabian Peninsula and European investors in Europe. That conclusion could come true until 5 to 8 years ago,” Bucak said.

“Especially American, Canadian and British investors are watching the Turkish real estate market closely. We see that European investors are also buying properties and showing an increased demand,” he added, noting that investors from about 80 countries bought houses in Turkey in recent months.

A vast majority of foreign investors are looking to buy houses in the country, while demand for office buildings is rising in parallel with foreign investment flows to Turkey, according to his remarks.

Some Italian and Pakistani investors are even interested in buying building plots, he said.

“Selling property to foreign investors is an area that requires special attention. Today, our competitors such as Dubai, Portugal, Greece and Malta are ahead of us with their regulations. We believe that organizational charters, certifications and employee criteria of the companies selling properties to foreigners should differ from other firms,” Bucak said.

Turkey’s Trade Ministry, the Treasury and Finance Ministry and Istanbul Ticaret University have been working together to update the directive for international real estate trade. Gigder wants all companies in the sector to be certified.

Turkey eyes $7.5 bln in property sales to foreigners - Latest News

Expecting a total amount of nearly $7.5 billion in sales to foreigners this year, the Turkish property market ranks among the top 10 in the world, according to an executive of a sectoral association.

www.hurriyetdailynews.com

 

[Saithan]

Turkish private sector's foreign debt falls in July​

ANKARA​

The Turkish private sector’s outstanding external loans stood at $173.3 billion in July, decreasing by $130 million compared to the end of 2020, the Turkish Central Bank said on Sept. 15.

Excluding trade credits, the sector’s short-term loans received from abroad were at $9.5 billion in July, down $240 million from the end of last year.

Liabilities of financial institutions constituted 83.2% of all short-term loans.

Broken down by currency, a major chunk of Turkey’s short-term credit- 38.2% - was in U.S. dollars, with 34.5% in euros, 23.8% in Turkish liras, and 3.5% in other currencies.

The private sector’s long-term debts increased by $110 million to hit $163.8 billion in July.

Some 40.7% of the total long-term foreign loans were owed by financial
institutions, according to latest data.

Most of the long-term loans- 61%- were in U.S. dollars, followed by 34.9% in euros, and 2.3% in Turkish liras.

Turkish private sector's foreign debt falls in July - Latest News

The Turkish private sector’s outstanding external loans stood at $173.3 billion in July, decreasing by $130 million compared to the end of 2020, the Turkish Central Bank said on Sept. 15.

www.hurriyetdailynews.com

 

[Nilgiri]

It's unlike RTE and current government to bother with rational fiscal policies, even in the face of inflation as I believe we've seen time and again. Trying to slowly build up reserves doesn't seem rational without sound reforms, which makes me think that government is trying to save up for something. Not necessarily to stabilize the economy, but more for a move they want to make.

Like I get what you mean, but I think its something lot more mundane than that.

Turkish govt essentially has the clearest picture at hand on what (forex) payments are coming up (that its staring at, given they signed up for it) regarding foreign debt in final quarter of this FY and some grey picture plans for it for next FY.

The latter would be process of the budget guys in (AKP admin) finance ministry applying pressure on rest of bureaucracy about funding needs and vice versa for availability, right about now...especially those that are foreign-currency capex and/or opex reliant (i.e imports are large % of it).

Given the inverted yield curves (regarding the domestic currency) and general heavy inflationary environment...it is not surprising that the consensus formed among these folks is one that needs to bump up foreign currency holdings past the current equilibrium...given those will unlikely be sufficient to service (by exchange rate) whats coming up.

It is in fact very much like (pressured) currency swap TR govt does on its own people (rather than say with another country/source of in-demand forex).

I'll explain a bit more in my next post....I'll have bit more time then.

 

[Huelague]

TotalEnergies to Invest $27 Billion in Iraq

The French energy giant signed a 25-year deal spanning fossil fuel and renewables.

www.wsj.com

Why we didn't invest in Iraq gas and oil and let France take this opportunity ?

I really dont understand.

 

[Lool]

Seems like AKP/Erdogan is in a fairly tough position.

If Erdogan pressures CBRT to cut interest rates to 'produce' cheap credit - in order to win support, he risks prolonging the effects of inflation, no doubt worsening the situtation, rather than dealing with it now.

If he allows CBRT to raise interest rates, the TL will re-gain some value, eventually leading to a drop in inflation. But this rise in interest rates will likely discourage investment and domestic consumption - leading to lower than expected GDP growth. (Going against his vision of high economic growth)

If he does nothing, the period between now and and election time will most likely be one of stagflation, with inflation still rampant, GDP growth fairly low and unemployment high. Potentially leading to a rise in the support of opposition parties - perhaps even a significant drop in support from his most loyal supporters.

This isnt the only problem though
Lets not forget that the Pandemic screwed not only Turkey but major countries worldwide as well. As a result, the purchasing power of several countries have decreased significantly. This means that if Turkey restored its lira power to its pre-pandemic levels (1 US dollar= 5.5 liras), either
1- Turkish exports will take a significant hit, which will decrease foreign dollars entering the country and widening the deficit
2- Increase in unemployment rates as Turkish companies wont be exporting much so less productivity and more firing than hiring in order to reduce costs; lets not mention that the newer generation will have to compete with those who were fired before which will ruin the futures of several ppl both new and old
3- Decrease of foreign investments as many investors may leave Turkey and head to cheaper alternatives like Egypt; in order to be able to export their products and earn profits
4- These 3 former points may force Turkey to lose their markets to other countries which will be the final nail on the coffin

However, while low lira seems good for exports, the government needs a strong lira for ease of imports, ease of paying debts, ease of living for the common Turk etc....

So Erdo is essentially trapped between 2 evils; none is better than the other
While Iam an advocate of strong lira, I certainly am not one of those whp just turn a blind eye to their drawbacks. After all, I dont want Turkey to turn into Tunisia 2.0

 

[Deliorman]

Our farmers are simply not competitive. We either need more technology and support for the local farmers, so they can get into the 21th century and be competitive or we need more big agriculture instead of small farms. It is beyond me how we can not be self-sufficient in food with a country as fertile as ours.

Look at Turkey's topography and tell me how it can be self sufficient in absolutely everything with a populations of 85-90 million. The flat areas of Turkey in total are basically equal to that of Bulgaria which has a population of 6,5 million people and believe me- we produce a shit ton on grains and sunflowers in here but I doubt that we can feed tens of millions of people with them. Turks are probably one of the biggest consumers per capita of all kinds of wheat and sunflowers products but to produce them you need huge flat land areas- like in Russia, Ukraine, France, Canada, America, Argentina etc.

 

[what]

Look at Turkey's topography and tell me how it can be self sufficient in absolutely everything with a populations of 85-90 million. The flat areas of Turkey in total are basically equal to that of Bulgaria which has a population of 6,5 million people and believe me- we produce a shit ton on grains and sunflowers in here but I doubt that we can feed tens of millions of people with them. Turks are probably one of the biggest consumers per capita of all kinds of wheat and sunflowers products but to produce them you need huge flat land areas- like in Russia, Ukraine, France, Canada, America, Argentina etc.

Even if the total arable area is too small, if the Netherlands can be self-sufficient and export billions of food products, so can we?

 

[HTurk]

Look at Turkey's topography and tell me how it can be self sufficient in absolutely everything with a populations of 85-90 million. The flat areas of Turkey in total are basically equal to that of Bulgaria which has a population of 6,5 million people and believe me- we produce a shit ton on grains and sunflowers in here but I doubt that we can feed tens of millions of people with them. Turks are probably one of the biggest consumers per capita of all kinds of wheat and sunflowers products but to produce them you need huge flat land areas- like in Russia, Ukraine, France, Canada, America, Argentina etc.

This is not true. Please provide sources for your statements. If I recall correctly, there was an European study about Turkey's agricultural potential which clearly stated that Turkey could supply and feed over 250 Million people with agricultural goods of all kinds.

I try to find it but I know your assumptions are factually wrong. Just ask anyone who knows Turkey's agricultural sector.

What is right, we need more big businesses instead of Uncle Mehmet and his 100 m2 field of buğday.

 

[what]

According to this we're 6th in the world when it comes to arable land.

Turkey Arable Land 1961-2025

Arable land (in hectares) includes land defined by the FAO as land under temporary crops (double-cropped areas are counted once), temporary meadows for mowing or for pasture, land under market or kitchen gardens, and land temporarily fallow. Land abandoned as a result of shifting cultivation is...

www.macrotrends.net

 

[Deliorman]

This is not true. Please provide sources for your statements. If I recall correctly, there was an European study about Turkey's agricultural potential which clearly stated that Turkey could supply and feed over 250 Million people with agricultural goods of all kinds.

I try to find it but I know your assumptions are factually wrong. Just ask anyone who knows Turkey's agricultural sector.

What is right, we need more big businesses instead of Uncle Mehmet and his 100 m2 field of buğday.

Turkey topographic map, elevation, terrain

Average elevation: 487 m • Turkey • Turkey's topography is a diverse tapestry of mountains, plateaus, and coastal plains that create a strikingly varied landscape. The country is predominantly characterized by the Anatolian Plateau, a semi-arid highland that stretches across central Turkey, with...

en-zm.topographic-map.com

Here is a map where you can compare Turkey's topography to that of Bulgaria and other countries around it. Just look north of Black sea to understand what I want to say when it comes to having a good geography for growing grains and sunflowers on an absolutely massive scale. These plant cultures just don't grow well in all kind of soils and topographies.

Turks are one of the biggest consumers of bread, sunflower seeds/oil and wheat products in the world + you need a shit ton of grains and sunflowers and hay and corn etc to feed the animals for your dairy and meat industry. Plus much of what Turkey imports as agricultural produce is used in the industry to be later re-exported as food a beverages. It's normal to import stuff when your production can't keep up with the demand.

Of course that Turkish agriculture should be re- shaped, made more competitive and modern and yeah, yeah... I know that the Netherlands is so small but they produce and export so much agricultural products etc. but just thinking about their tomatoes and strawberries makes me want to eat cardboard because it tastes better. The agriculture they have there is so high tech that 99% of Turkish farmers can't ever afford it.

 

[Nilgiri]

Like I get what you mean, but I think its something lot more mundane than that.

Turkish govt essentially has the clearest picture at hand on what (forex) payments are coming up (that its staring at, given they signed up for it) regarding foreign debt in final quarter of this FY and some grey picture plans for it for next FY.

The latter would be process of the budget guys in (AKP admin) finance ministry applying pressure on rest of bureaucracy about funding needs and vice versa for availability, right about now...especially those that are foreign-currency capex and/or opex reliant (i.e imports are large % of it).

Given the inverted yield curves (regarding the domestic currency) and general heavy inflationary environment...it is not surprising that the consensus formed among these folks is one that needs to bump up foreign currency holdings past the current equilibrium...given those will unlikely be sufficient to service (by exchange rate) whats coming up.

It is in fact very much like (pressured) currency swap TR govt does on its own people (rather than say with another country/source of in-demand forex).

I'll explain a bit more in my next post....I'll have bit more time then.

Part 2 @Saithan :

In fact they may have already calculated how much more % wise they need it (forex saving ratio) at roughly (to handle the climb coming into view...and seeing where the inverted yield is for Lira itself),

i.e This could be just phase 1 in the bump up...and more phases to follow if "look + see" wise....things are deemed "manageable" (rather than move bankers from frying pan to fire all in one go so to speak).

I saw typical instances of this when I studied (at depth) India's financial history post-liberalisation (in 1991) regarding such things as "NRI bonds" when whichever govt was racked with inflation and churning dynamic debt needs at same time (during the 90s especially but also in later periods).

i.e they would start an incremental tweaking process in certain ratio levers as relatively easy way to prioritise some assured buffer for later that they modelled/predicted (when a bunch of other crap was going on that they would rather ignore). This has eased in frequency as the system matured and stabilised.

Some focused study of all of this (along with the proven history of it) is what credit rating agencies (try to) do in the end essentially....the tendencies and results of the system (and esp the systems relevance to larger world system).

Now to the banker (or related finance executive guy that represents all that have invested savings into his entity and/or taken loans from him)...he essentially does his business by doing a freemarket circuit...collecting and dispensing lira and also the same for foreign currencies as they percolate and gather in the orchard route (among the free agent "trees" of all sizes) he has charted out.

Small difference in what he demands for lending out compared to what he offers for taking in is how he makes profit....especially when scaled over the number of transactions involving this given the velocity of money (and its assured monolithic nature when it comes to a national currency).

The govt essentially takes a cut (i.e forces a forex ratio that is "rested/captive" for the govt to dispense at its pleasure, with promise the govt will also intervene to help if he faces a crunch in "lender of last resort" way) each round of this circuit.

The whole thing is essentially a kind of extortion that is found acceptable by society in greater (national) good. Very similar concept to how govt itself exists (and imposes and taxes things) in exchange for running administration and handling security of nation at large etc.

Anyway a bump of a few % points is effectively like the govt toll-collector thug guy (that the banker is fully accustomed to in a same point, same time, same face way) grabbing the banker's heels and shaking him (upside down) 6 times now instead of 5 times (say each shake is 4% of all you have and you keep what sticks to you still)...and then giving him nod to be on his merry way on the circuit again.

Its incrementalism more than grand operation stuff, bankers are desensitized to whole process (plus they transmit the cost near 100% rather than absorb it). In fact its bankers that essentially designed (i.e compromise of public and private interest) and advised the govt on this system in first place.

The effects and costs really end up resting on those arraigned around the circuit that depend on the various different liquidity flows in various different ways.

A big business would be different to another big business....which is different to a small business...which is different to a family and individual etc regarding this (each one's basket composition relating to what turkey can provide in lira and what it needs another foreign currency for instead).
This is why its important to have sound and solid institutional (and technocratic + democratic) consensus rather than easy govt thug dynamics and process.

Even if AKP admin were completely foible+issue free (in a hypothetical for argument sake), the very entrenchment at helm for couple decades drives does its own thing in regarding how thug dynamics (in crucial areas and institutions) inevitably settle.

It comes back to my 2 term thing.

This has literal consequences on inflation rate result for example, it is a running operating cost of a fouled up govt system (a govt that has got too used to itself as govt) in a world with wax and wane of various challenges that arise (covid pandemic effect on economy is just one large example).

Any govt that is say changing (conveniently and/or hypocritically) what the definition/basket of inflation is, instead of trying to fundamentally deal with it.... is clear sign of it not introspecting itself.

Public simply have to be rational enough to hold them accountable and try another set of guys....and keep in mind the 2 term thing more generally going forward.

@Sinan @Deliorman @xenon5434 @Anmdt @UkroTurk 🚬 et al.

 

[HTurk]

Turkey topographic map, elevation, terrain

Average elevation: 487 m • Turkey • Turkey's topography is a diverse tapestry of mountains, plateaus, and coastal plains that create a strikingly varied landscape. The country is predominantly characterized by the Anatolian Plateau, a semi-arid highland that stretches across central Turkey, with...

en-zm.topographic-map.com

Here is a map where you can compare Turkey's topography to that of Bulgaria and other countries around it. Just look north of Black sea to understand what I want to say when it comes to having a good geography for growing grains and sunflowers on an absolutely massive scale. These plant cultures just don't grow well in all kind of soils and topographies.

Turks are one of the biggest consumers of bread, sunflower seeds/oil and wheat products in the world + you need a shit ton of grains and sunflowers and hay and corn etc to feed the animals for your dairy and meat industry. Plus much of what Turkey imports as agricultural produce is used in the industry to be later re-exported as food a beverages. It's normal to import stuff when your production can't keep up with the demand.

Of course that Turkish agriculture should be re- shaped, made more competitive and modern and yeah, yeah... I know that the Netherlands is so small but they produce and export so much agricultural products etc. but just thinking about their tomatoes and strawberries makes me want to eat cardboard because it tastes better. The agriculture they have there is so high tech that 99% of Turkish farmers can't ever afford it.

Topography ≠ arable land

Plus, it's not like that Turkey is a big, fat zero when it comes to agriculture.

"In 18 years, our agricultural exports increased from $3.7 billion to $18 billion. Turkey has been exporting 1,827 kinds of agricultural products to 193 countries."

We're just angry about the fact that we still haven't reached our full potential. Having said that, I see some major shifts in our agricultural industry since the TRY went down badly. Let's see if these changes are lasting.