ANKARA: Turkish business circles want to see the end of post-election uncertainties and express their concerns to politicians. Many of them are under huge debt burdens. Their biggest concern is the possibility of the non-establishment of any coalition government and entering a snap election period, which will both increase political risks.
The United States Federal Reserve (Fed) did not make any change in rates last week, parallel to expectations. The Fed, however, signaled a rate hike within 2015 again. This has triggered expectations about a rate hike in September. The bank’s signals about lower rates in slower than earlier expected has enable emerging markets, including Turkey, to save at least six months.
The negative effects due to the expected rate hike by the Fed have recently been limited. Some relatively good news is also resolving Greece’s bailout problems. We didn’t see a big investment rush out of Turkey, despite high political risks the country has. The Turkish Lira has gained some value after the elections, lowering to 2.65 against the dollar from the lira’s 2.75 exchange rate during the elections. Nevertheless, Turkey has a big volume of debt stocks at $164 billion, which must be paid back in the next 12 months. This huge amount represents around 40 percent of the country’s total external debt stock, $403 billion.
