Turkey seeks global funding help to gird against lira shock

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Turkey’s government has appealed to foreign allies in an urgent search for funding

Turkey’s government has appealed to foreign allies in an urgent search for funding, three senior Turkish officials said, as it prepares defences 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 officials said.

Cevdet Yilmaz, the ruling AK Party’s deputy chairman for foreign affairs, confirmed on Thursday that Turkey was seeking swap agreements.

“We are having negotiations with different central banks for swap opportunities,” he told a panel discussion, adding: “It is not only the U.S., there are also other countries.”

He did not give further details.

The push comes after the lira hit a historic low last week, limiting Ankara’s capacity to address concerns over its depleted foreign reserves and hefty debt obligations.

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One of the officials told Reuters Turkey was feeling confident after the talks. But it was unclear how close it may be to securing any deals as the coronavirus pandemic stretches governments and central banks like never before.

Turkey’s Treasury ministry, Japan’s finance ministry and the Bank of England declined to comment. The People’s Bank of China did not respond to a faxed request for comment. Qatar’s government media office did not respond to a query about expanding the swaps with Ankara.

If Turkey cannot secure tens of billions of dollars worth of funding, analysts say it risks a currency spiral tmsnrt.rs/2L5ks0o similar to 2018, when the lira briefly shed half its value in a crisis that shook emerging markets.

Read more: Reuters

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