Thread Reader
Brad Setser

Brad Setser
@Brad_Setser

Nov 25
12 tweets
Twitter

The ability of Turkey's President Recep Tayyip Erdoğan to get financing from “friendly countries” is really quite impressive -- even countries that themselves aren't exactly friends have lent large sums to the CBRT ... 1/

Today's news is that the Qataris may augment their existing $15 billion in support (via a swap line) with an additional $8-10 billion (including the purchase of a Turkish eurobond, which would deliver USD not just QAR) 2/ reuters.com/world/middle-e…
The Qataris are more than keeping pace with the Saudis, who are in talks for only $5 billion (structured as a deposit at the CBRT) ft.com/content/ae8531…
The Saudis joined the Russians, who had to take a more convoluted path to get money to Turkey -- Gazprombank lent $7b to Rosatom, which transferred the funds to its Turkish JV (they then were placed in Turkish deposits/ dollar bonds) middleeasteye.net/news/russia-tu…
The Russians joined the Emiratis, who have a $5 billion swap with the CBRT bloomberg.com/news/articles/…
And the Emirati swap (from early 2022) kept pace with China, which augmented its swap to $6 billion in the summer of 2021 ... reuters.com/article/turkey…
Korea hasn't wanted to lose out commercially to China -- in October, the CBRT drew $780 million (around TL 14.5 billion) from its $2b swap line with Korea ... 7/ dailysabah.com/business/finan…
Even the Azeris (no friends of Russia) have provided $1 billion through their state oil company. And I am still trying to figure out the additional $2 billion deposit from a country to be named later ... (in the July BoP I think, so it is real) 8/
External fx liabilities (including $23-24b per Reuters from the drawn swap lines) are now equal to about half of Turkey's reported liquid fx reserves (I am leaving the gold out) 9/
And the CBRT has another $50b or so in swaps with the domestic banks (off balance sheet FX liabilities) and over $80b in on balance sheet liabilities to the domestic banks (dollar deposits as part of the banks reserve requirement, etc). The CBRT's fx liabilities are massive 10/
Unsurprisingly, the CBRT now actually wants "real" fx (dollars and euros) from deposits, not swaps that inflate stated reserves with difficult to use currencies (Qatari riyal, UAE dirham) 11/ reuters.com/world/middle-e…
Erdogan has lined up a substantial amount of new funding it seems, even relative to Turkey's $40 billion current account deficit. Combine the new deposits with soft capital controls, and Turkey doesn't yet look to be close to running of fx 12/ mei.edu/publications/l…
Brad Setser

Brad Setser

@Brad_Setser
CFR senior fellow. Views are my own. Retweets are not endorsements. Writes on sovereign debt and capital flows.
Follow on Twitter
Missing some tweets in this thread? Or failed to load images or videos? You can try to .