Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
Biden seeking a five-year extension to START II missile treaty
Russian consumer confidence index drops q/q, y/y in 4Q20
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s Khamenei menaces private citizen Trump with image of aircraft shadowing blond golfer
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
Retail and commercial borrowers’ payment delay requests regarding payments until end-2020 must be met by the lenders, the Turkish banking watchdog BDDK told local lenders on July 8 in its latest letter of instructions.
The existing loan limits should not be blocked without justified and concrete reasons, and care should be taken to keep the loan limits ready for use, the 11-article instructions also said.
It has also requested convenience for credit card fees and demanded that the credit card fee collection should be temporarily delayed in line with the demands of customers.
Lastly, banks’ precautionary measures on restricting credit card limits and closing credit cards to cash withdrawals should not be stricter than the rules specified in the legislation.
On July 9, the BDDK released a separate ruling to increase the maximum limit for credit cards for customers who cannot declare their income to TRY2,000 from TRY1,300.
Additionally, banks will not close credit cards where the minimum payment amount is not paid three times in a calendar year until end-2020.
Also on July 9, the regulator fined seven banks a total of TRY205mn (around $30mn) after individual and institutional customers made complaints.
“The inquiry process regarding customers’ complaints is ongoing,” it said in a statement.
In May, the watchdog imposed fines totalling TRY102mn on 18 banks after examining complaints by customers.
On July 11, President Recep Tayyip Erdogan authorised the central bank to obtain real time data from local lenders.
The central bank, the BDDK banking watchdog, the SPK capital markets board and the trade ministry separately issued new regulations along with amendments to existing regulations with an impact on banking.`
The BDDK has employed a proactive perspective in introducing around 50 regulations since the beginning of the coronavirus (COVID-19) outbreak, Mehmet Ali Akben, head of the regulator, said on June 14.
His figure does not include regulations or regulatory amendments introduced by other authorities, while the overall list of regulatory forbearance instances since 2016 would deserve a PHD thesis.
Local lenders assign zero weight to their FX receivables from the Treasury and the central bank although Turkey is rated at deep junk by all rating agencies.
Moreover, they calculate their FX assets at the 2019 exchange rate and they do not write defaulted loans as non-performing loans (NPL) though they regularly restructure them.
On July 2, Reuters quoted seven unnamed industry sources as saying that some Turkish banks are reportedly concerned that a “bad bank” plan to house billions of dollars of NPLs could require them to book large losses.
Additionally, the government announced some capital hikes at state lenders but media reports overlooked that the “capital hikes” in question were performed through exchanging some government papers among the Turkey Wealth Fund (TVF), the unemployment fund and state banks.
The overriding idea is that the government wants more loan growth when it comes to both individuals and firms.
The lenders are also obliged to comply with a recently introduced “asset ratio”.
“Will we be looking back nostalgically at the time of COVID-19 which, like my optimism about EM sales-trading, will seem like a distant memory or will we still be in the thick of it? The latter scenario seems far more plausible and if not the disease itself then the consequences of it which I suspect we will live with years, especially the financial,” Julian Rimmer of Investec wrote on July 10 in an emailed note to investors.
“It's possible to envisage for example, that by autumn, Turkey to be in the middle of a fully-fledged currency crisis, Russia to be sanctioned and cut off from Swift and South Africa to hurtling headlong into economic distress. These may be the worst-case scenarios but they are more likely to be the eventual outcome than any best-case scenario you can conjure up,” he added.
“In Turkey, one of the local brokers to whom I speak sent me the following message today, 'regulators raised the minimum credit card limit to be approved by a bank from TL1,300 to TL2,000 (Neutral).' Yes, you read that correctly, the MINIMUM cc limit not the maximum and yes, the broker felt obliged to tell me its impact was neutral as opposed to really, really … negative,” he also wrote.
“I'm going to Turkey next week and since I have a Turkish bank account, I see no reason why they won't give me some flexible plastic and allow me to blow few grand on it and then just bugger off and leave someone else to socialise the debt,” he wrote.
“The macro coming out of Turkey is starting to take on ominous dimensions again. The credit boom is a result of pressure on the banks by the govt to keep the economy moving and can only end in disaster. Whether the banks pick up the bill for imprudent lending or the govt, the consequences for the country as a whole are the same… encouraging banks to lend imprudently into [consumption] will mean a financial reckoning at some point,” Rimmer wrote.
“I feel another period of lira weakness is looming. I read yesterday, 'The combination of a big policy push for banks to lend out to the private economy and sharply rising government funding needs has pushed total domestic credit and lira broad money growth to more than 40% y/y'. I have limited formal economic knowledge but enough to know that sounds like a recipe for 'Add Weirdogan — instant $hitshow',” he concluded.
“Buoyed credit growth in the coming months, helping to support the fledgling EM recovery. But this may come at the cost of a further misallocation of resources in the likes of China and Turkey,” Edward Glossop of Capital Economics wrote on July 8 in a research note.
“Robust cross-border banking sector flows have helped to support lending in countries where sectors are dependent on external financing (notably Turkey),” he added.
“While robust credit growth during the crisis is — overall — a good thing, it could create problems further out. It will exacerbate the misallocation of resources in China, which will constrain potential growth there. A similar problem is brewing in Turkey. With policymakers funnelling credit into unproductive sectors, this could create long term economic distortions which will be difficult to unwind,” he concluded.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at firstname.lastname@example.org
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: