Halkbank, not Turkey, will pay any US fine: Şimşek

ANKARA - Neşe Karanfil

Any fine levied against Halkbank by the United States will be paid by the bank itself and not the Turkish Treasury, Deputy Prime Minister Mehmet Şimşek has stated.

A U.S. jury last week convicted a Halkbank executive of bank fraud and conspiracy to violate U.S. sanctions against Iran, in a sanctions-busting case that the Turkish government claims is a political attempt to undermine its economy.

Halkbank, which is majority state owned, has denied wrongdoing and says all of its transactions are in line with local and international regulations.

“If Halkbank receives a fine, Halkbank will pay it. We will not borrow for Halkbank,” said Şimşek, who is responsible for economic matters.

He stressed that the Treasury’s strong cash position is not related to the situation of Halkbank.

Protocol between KGF, Treasury

Meanwhile, Şimşek also said a protocol between the Treasury and the Credit Guarantee Fund (KGF) would likely be signed soon over the use of the credit returns.

The fund has so far utilized some 200 billion liras of the 250 billion lira warrant limit, which had been offered. The remaining amount has not been assessed.

Şimşek said the remaining 50 billion lira credit would be funneled mainly to manufacturing and export-focused sectors.

“A third of this amount will be offered to exporters, a third to industrial manufacturers, and the remaining part will be used to boost female entrepreneurship and agricultural investments,” he added.

He also said nearly 130 or 140 billion liras of returns are expected for the KGF credits.

High inflation

On Turkey’s persistently high inflation, Şimşek said in 2018 inflation would not be triggered by public sector spending, as had been the case in 2017.

“Our Central Bank has adopted a tight monetary policy. The Food Committee has taken the required measures to curb food prices. We can always discuss whether these measures are efficient or not but it will be unfair if anyone says nothing has been done in this area,” he added.

“We have an obvious will to push down the inflation rate to single-digits and we have developed the required policies to achieve this goal. We will maintain our stance,” the deputy prime minister said, adding that “a number of structural reforms” would soon be made in an effort to reduce the inflation rate and the current account deficit and to raise Turkey’s competitiveness.

Şimşek also noted the government is working on a new model on housing that will offer cheaper housing loans to those who accept a cheaper interest rate for their deposits at an earlier stage.