Speaking in Ankara on Wednesday, Turkey’s President Recep Tayyip Erdogan announced that Turkey will issue so-called panda bonds in China to “diversify its sources of financing,” raising money in Chinese yuan rather than in US dollars or euros. He also called on Turkish citizens to engage in “national resistance” and to convert the foreign currency they kept under their mattresses into Turkish lira.
Turkey’s lira has lost 30% of its value this year and the Turkish stock market has lost more than 40% of its value in US dollar terms, most of it before the United States introduced sanctions against Turkey in retaliation for the jailing of an American Christian clergyman. Turkey is running a current account deficit equal to 6.5% of GDP, one of the highest in the world, and is running out of financing sources.
The idea of borrowing in Chinese yuan has been in preparation for months. Last February, the Turkish Treasury announced that it had asked several Chinese and foreign banks to prepare for panda bond issuance during the second half of 2018.
Last week, the Industrial and Commercial Bank of China announced that it would refinance US$2.7 billion of loans to some of President Erdogan’s prestige infrastructure projects in Istanbul.
China views Turkey as a terminus on the New Silk Road project. With Turkish equity valuations close to all-time lows, selective Chinese bottom-fishing in the Turkish market is to be expected. Turkey has also expanded military cooperation with China during recent months, the website Al-Monitor reported yesterday.
Chinese are the smartest people when it comes to lending money..so many string attaches and high inteterest to the borrowers…beware turkish its a debt trap that you will regret later…swim at your own risk as they say. . . .
CHINESE MONEY = SHYLOCK’ MONEY.
To be paid extra price over libor+interest.
What’s your credit rating? Do do you even knwo what it is?
Here is how western free market financing works. The more you really really need the money, the less likely any banker is willing to lend it to you. The more they think you don’t need the money at all, the more western bankers will be begging you to borrow their money, and pay interest of cause.
Anyone who listens to the idiot Erdogan amd converts his money to Lira is also an idiot. His converted money will be worth less and less and not even fit to be used as toilet paper because of it’s size.
Very soon, the Turkish flag will be replaced by Chinese flag and the people of Turkey won’t even notice it because they look alike.
By artificially attacking the Turkish currency, Washington makes a dangerous bet. Either he will overthrow Erdogan or push Turkey into the arms of China-Iran-Russia.
Indians talking about money is funny kumari..????
Why can’t Turkey just negotiate with US on the process of releasing the pastor. Surely can you suffer just cause of one man Turkey. Mr President try to be realistic please