Analysis
Smart, independent reporting on Turkey's politics, economy and foreign affairs.
Sweeping reforms to capital markets institutions will hinge on a State Audit Council (DDK) report on the multi-billion-dollar investment fund scandal, with President Recep Tayyip Erdoğan awaiting its findings before taking action.
The Central Bank cut its benchmark policy rate by 100 basis points to 36% on Oct. 22, its first monetary easing since January, in line with market expectations.
More than a month after the fund collapse occurred, the shockwaves continue to rock the stock market. The crisis wiped out trillions of liras in corporate market capitalization and drove key valuation metrics to multi-year lows in Borsa Istanbul.
With the investment fund scandal still unfolding, a new allegation has come to light: companies were asked for bribes to secure approval from the Capital Markets Board (SPK) to go public.
Statements attributed to Central Bank Governor Fatih Karahan during IMF and World Bank meetings in Bangkok sparked debate over foreign exchange policy, prompting a direct denial from a top market economist who attended the session.
For nearly half a million retail investors caught in Turkey’s worst financial storm in years, compensation has finally begun to flow. But the first cash distributions came as the fallout spread beyond Turkey’s borders: global index provider MSCI froze index changes for Turkish equities on Oct. 15 and warned of a possible downgrade, while prosecutors broadened their probes and lawmakers scrambled to pass emergency legislation.
The ruling party has rapidly rolled out compensation for some victims of the stock market scandal that is rocking the government, and cut ties with one former minister, while the main opposition Yeni Party links two sitting ministers to the affair.
For the first time in nearly five years, Turkey’s annual inflation rate slipped below 30%, giving the central bank room to consider easing monetary policy at its meeting on Oct. 22.
The government is seeking to create the impression that it is cutting ties with those involved in the stock market scandal and has launched an investigation, announcing that up to a million liras of losses will be repaid to investors soon. But the opposition calls it the 'corruption of the century' and is seeking a parliamentary inquiry.
In December of last year, the Chinese carmaker SWM Motors began production in Eskişehir, with ambitious plans. Annual production of 20,000 to 25,000 vehicles was to grow substantially and the factory was eventually to serve as a base for exports to the Balkans and neighboring markets.
The Borsa Istanbul’s benchmark BIST 100 index entered a technical bear market at the end of September, marking its worst monthly performance since the 2008 global financial crisis.
The government is preparing comprehensive reforms across its financial regulatory bodies following the massive investment fund crisis that shook domestic markets.