As per a Reuters news today, Turkey’s government has appealed to foreign allies in an urgent search for funding, three senior Turkish officials said, as it prepares defenses against what analysts fear could be a second currency crisis in as many years.
Treasury and central bank officials have held bilateral talks in recent days with counterparts from Japan and the United Kingdom on setting up currency swap lines, and with Qatar and China on expanding existing facilities.
The AKP’s deputy chairman for foreign affairs Yilmaz told they were having negotiations with different central banks other than the Fed for swap opportunities. No details were given while the mentioned central banks declined to comment. Speaking with anonymity, one official said “Talks are in a better position especially with Qatar, China and Britain. I am optimistic that a certain amount of resources will be provided” and an agreement should “not take too long”.
Investors comment that unless a swap deal is secured, Turkey risks a currency depreciation spiral similar to 2018, when the lira briefly shed half its value. With roughly USD 50 billion lost in the tourism and the export sectors along with USD 170 billion debt payments due in the next 12 months, investors argue Turkey would either has to raise its policy rate, seek for IMF support of bring in capital controls. All of which are denied by the AKP government.