‘Türkiye Secures $7.5 Billion in Project Financing This Year’
The amount of external resources for project financing Türkiye received as of November this year reached $7.5 billion (TL 215.36 billion), the Treasury and Finance Minister told Anadolu Agency (AA) Friday.
Minister Mehmet Şimsek also recalled that Türkiye and the European Investment Bank (EIB) this week signed a loan agreement worth 400 million euros ($435 million) for use of rebuilding after the Feb. 6 earthquakes.
The loan, which is fully guaranteed by the European Union, will help restore water and wastewater infrastructure in the southern Turkish provinces hit hard by the two powerful earthquakes.
Pointing out that the last project financing provided by the EIB was in 2018, Şimşek said, “Our communication with the EIB, as with other international organizations, has become much stronger.”
Şimşek stressed that the Turkish government is spending about 3% of gross domestic product (GDP) this year to rebuild quake-hit regions.
The minister also earlier this week announced the establishment of the “Türkiye Green Fund” supported through a loan worth $155 million given by the World Bank – aimed at providing green financing to businesses, promoting investment in green technologies and diversifying the financial sector.
Evaluating the outsourcing of $7.5 billion for project financing this year the minister in a post on his social media account on the X platform said that “there is strong support for our program that we have implemented to ensure macro-financial stability.”
Following the presidential and parliamentary elections earlier this year, the new economic team that includes Şimşek, who returned as finance minister, and Hafize Gaye Erkan who took over as central bank governor Türkiye overhauled the monetary policy stance and set up measures including monetary tightening to rein in inflation.
“We are reducing fragility by increasing international reserves. We will continue to do whatever is necessary for a permanent decrease in inflation and current account deficit,” he vowed.
The 12-month rolling current account deficit has declined from $56.6 billion to $51.7 billion, Trade Minister Ömer Bolat said earlier this week while the country’s current account balance posted a nearly $1.9 billion surplus in September, as per the central bank.
At the same time the country’s five-year credit default swap (CDS), which is one of the main indicators of risk premium maintained a downward trend and fell below 350 basis points on Friday, the lowest in nearly three years, AA said.
The CDS fell below 400 basis points earlier in November despite the ongoing geopolitical risks, as measures taken by the country’s new economy administration to ensure price stability are being gradually implemented.
In October, the Central Bank of the Republic of Türkiye (CBRT) hiked its policy interest rate by another 500 basis points to 35%, meeting the market forecast.
Over the course of five monetary policy meetings, the bank has lifted the key policy rate, also known as the one-week repo auction rate, from 8.5% in May to 35% last month.
Source; Daily Sabah
