Erdogan says Gulf states sent cash in relief for Turkey
Turkish President Tayyip Erdogan said on Thursday that Gulf states recently sent funding to Turkey, briefly helping relieve the central bank and markets, and he intends to meet and thank their leaders after Sunday's runoff presidential election.www.reuters.com
I don't think a default is going to happen, though Turkiye will come under further economic strain for sure.
The largest foreign policy activity concerning this will likely be Turkish administration approaching more gulf countries for capital account funding by either SAFE (State administration of Foreign Exchange) deposits and/or currency swaps.
It is unlikely this will occur with any others (West, China, East Asia) given current geopolitical and economic climate (a long topic to get into)
Gulf countries on the other hand have ample reason to improve relations with Turkiye and/or extract more concessions and political capital (from say Erdogan admin) by doing so.
Their 5 largest sovereign wealth funds :
ADIA (UAE) ~ 700 billion USD
KIA (Kuwait) ~ 700 billion USD
PIF (KSA) ~ 580 billion USD
QIA (Qatar) ~ 450 billion USD
ICD (UAE) ~ 300 billion USD
Its unclear what state of leveraging these are all at with their own domestic and other commitments though....but just to give an idea of what I feel Turkiye will approach (given its now poor international credit rating) in greater capacity now past what it has dabbled so far with sukuk bonds and some currency swaps mostly with these same countries.
The drop in Turkish forex is starting to look very concerning (given its trade, investment and GDP denominators):
Turkey Gross Foreign Exchange Reserves
Foreign Exchange Reserves in Turkey decreased to 93010 USD Million in November 1 from 93510 USD Million in the previous week. This page provides the latest reported value for - Turkey Foreign Exchange Reserves - plus previous releases, historical high and low, short-term forecast and long-term...tradingeconomics.com
Looking at bare minimum ratios that other developing countries under financial stress have had recently or in the past..... TR will want to stabilise at least above 50 billion given its imports are ~300 billion a year and more importantly with the CAD trend where it is:
Turkey Current Account Balance, 1992 – 2024 | CEIC Data
Turkey Current Account recorded a surplus of 4.3 USD bn in Aug 2024, compared with a surplus of 778.0 USD mn in the previous month.www.ceicdata.com
i.e it will need about 50 - 100 billion injection (depending on current account performance this year compared to 2022) on capital side this year to handle both this and the capital account debt repayments given what its burning through on both current account side and domestic fiscal side.
This is a malady that has been allowed to get to this stage...by reasons long discussed in this thread.
IMF and Erdogan admin will find zero common ground....as the latter will simply not reverse the low interest rate policy that in large part worsened this deep mess to begin with.
So there is no chance of IMF being involved in foreseeable future. The meeting ground is burned and salted already basically.
I mention the gulf countries because thats where Turkiye has mostly been able to sell its sukuk bonds (well past its regular bonds) and arrange currency swaps to essentially buy time till this election being done now.
It was not small amount of money, some 10's of billions of dollars so far.... I'd have to look into it for exact amount, but the matter stands that they are the likeliest option for continued funding to keep ship afloat.
Even on this forum, lot of members miss the woods for the trees by focusing on smaller sectors of their particular interest rather than learn about the larger economy (and its deep systemic problems) and call out those issues fairly to powers that be.
Overall a lot (cost and impact wise) depends on what specifics play out post election:
Turkish default protection costs soar as Erdoğan leads presidential vote
Cost of credit default swaps records biggest rise in two years, while bonds sell offwww.ft.com
This guy is going to put Turkey in massive debt to the Gulf states to avoid doing the obvious to fix the economy.Erdogan says Gulf states sent cash in relief for Turkey
Turkish President Tayyip Erdogan said on Thursday that Gulf states recently sent funding to Turkey, briefly helping relieve the central bank and markets, and he intends to meet and thank their leaders after Sunday's runoff presidential election.
Get loans from the IMF or London loan sharks you mean?
We don't need any fixing.
Yeah UAE, SA are so reliable.
it’s definitely going to get worseErdogan says Gulf states sent cash in relief for Turkey
Turkish President Tayyip Erdogan said on Thursday that Gulf states recently sent funding to Turkey, briefly helping relieve the central bank and markets, and he intends to meet and thank their leaders after Sunday's runoff presidential election.
How about admitting that keeping the interest rates low is a bad idea?
While you are writing this Turkish bureaucrats are begging London loan sharks on the orders of Erdogan, to lend them dollars with a %10+ interest rate. You are living high on copium.
You know very well that not borrowing from them means beyond what is required to roll the debt we owe them already. The debt stock does not go away overnight.
and a 
