Turkey is ready to support its banks, if needed: Albayrak

NEW YORK

The Turkish government is ready to provide required support to its banks should the need arise due to recent developments, Treasury and Finance Minister Berat Albayrak has said.

Addressing an audience of representatives from the business world in New York on Sept. 24, he also said Turkey was comfortable with its macroeconomic indicators.

Albayrak said banking debt-to-GDP ratio is around 26 percent in Turkey, making the country in a better situation than the world average and compared to other emerging countries.

The minister noted the Turkish private sector’s debt-to-GDP was 65 percent, much lower than what all emerging countries face on average at 94 percent.

“The Turkish public sector, households or businesses do not face any debt problem,” he said.

Turkey will adopt a proactive approach to ease its economic fragilities, Albayrak said.

“The Turkish government is ready to give the required support to lenders if needed in the face of the latest developments,” the minister said.

Turkey’s banks face a potential deluge of bad debt after the lira plunged 40 percent this year, driving up the cost for companies to service their foreign currency loans.

Albayrak also said that budget discipline and price stability would be the pillars of Turkey’s economic policies.

Turkey sharply cut its growth forecasts for this year and the next on Sept. 20, partly in a sweeping plan to help banks.

Albayrak then said growth would be 3.8 percent this year and 2.3 percent in 2019, both revised down from forecasts of 5.5 percent.

However, he did not deliver the big plans for the banking industry that some analysts had been hoping for, particularly, the creation of a “bad bank” vehicle to take over non-performing loans.