News / Europe

Turkey Probes Financial Markets

A currency exchange office in downtown Istanbul, June 21, 2013.
A currency exchange office in downtown Istanbul, June 21, 2013.
Dorian Jones
Turkey's financial markets are being investigated by the country's regulatory board.  The investigation, as well a global sell-off in developing economies and anti-government protests, is threatening the faith in the country's capital markets.

The Ankara-based Capital Markets Board launched the probe after a massive exit from Turkey by foreign investors starting in late May, which caused stocks to plummet, raised borrowing costs significantly and sent the currency to record lows against the dollar.

The investigation is looking at whether the markets were illegally manipulated.  The move comes as Turkish Prime Minister Recep Tayyip Erdogan continues to blame an international financial conspiracy for fomenting the ongoing anti-government protests.

Atilla Yesilada is an analyst with political consulting firm Global Source Partners.  He says the investigation is a worrying sign.

"These are very well documented transactions.  They could simply ask the central bank to provide all the bank data they need.  Why are they going after the banks?  And to top that, why are they asking banks what they did with the money they purchased in those auctions?  I really don't know.  There seems to be no rational explanation except.  A: They are trying to intimidate the banking community; or, B: The manipulation investigation has reached a point where they are really looking for the final piece of evidence to take it to the prosecution stage.  At a time when financial sentiments are really fragile, these are not the appropriate measures to restore faith in the Turkish markets," said Yesilada.

Inan Demir is chief economist for the Istanbul based Finansbank.  He also warns it's not the time to frighten foreign investors.

"Turkish growth performance has been very closely linked to the availability of foreign capital because of a chronic lack of savings at home.  Now it's not that I don't expect Turkey to roll over its debt that is going to mature in the next 12 months.  But with global liquidity less abundant, it could be more costly for Turkey, in the sense that it could have to pay higher interest rates to roll over those debts.  Then growth is likely to suffer," said Demir.

In the next 12 months Turkey has to pay back or roll over about $200 billion in debts.  At the same time, international capital flows are needed to sustain one of the world's largest current account deficits, which rose again this month.

Analyst Yesilada points out that with no person or company as of yet charged with wrongdoing, international investors appear to be keeping their nerves.

"So far nobody has been hurt and most of the global fund managers are veterans of domestic turbulence, and many discount as what is happening now in Turkey as just political rhetoric.  I am afraid slightly more than that, and if I am correct, the shock waves would be of the nature of a major earthquake," he said.

This week,  Erdogan appointed Yigit Bulut as his chief adviser. Bulut is one of the most vocal advocates of the idea that a financial conspiracy is responsible for the unrest, so it appears there is little chance of the government halting the investigation.  Observers warn in such a climate, the current investigation of financial manipulation could extend to more serious charges of conspiring against the government, which could likely further unnerve international financial markets.

You May Like

Nigeria Incumbent in Tight Spot as Poll Nears

Muhammadu Buhari is running a strong challenge to Goodluck Jonathan, amid a faltering economy and Boko Haram security worries More

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo tells VOA that despite her fame, life is still a struggle as she waits for government's promise of support to arrive More

Video Cambodian Land Grabs Threaten Traditional Communities

At least seven different indigenous groups in Ratanakiri depend mainly on forest products for their survival, say they face loss of their land, traditional way of life More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Liberia's Almost Last Ebola Patient Grateful but Still Grievingi
X
Benno Muchler
March 26, 2015 3:41 PM
Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Liberia's Almost Last Ebola Patient Grateful but Still Grieving

Beatrice Yardolo was to make history as Liberia’s last Ebola patient. Liberians recently started counting down 42 days, the period that has to go by without a single new infection until the World Health Organization can declare a country Ebola-free. That countdown stopped on March 20 when there was another new case of Ebola, making Yardolo’s story a reminder that Ebola is far from over. Benno Muchler reports from Monrovia.
Video

Video Cambodian Land Grabs Threaten Traditional Communities

Indigenous communities in Cambodia's Ratanakiri province say the government’s economic land concession policy is taking away their land and traditional way of life, making many fear that their identity will soon be lost. Local authorities, though, have denied this is the case. VOA's Say Mony went to investigate and filed this report, narrated by Colin Lovett.
Video

Video US, South Korea Conduct Joint Military Exercises

The Eighth U.S. Army Division and the Eighth Republic of Korea Mechanized Infantry Division put on a well orchestrated show of force for the media this week during their joint military training exercises in South Korea. VOA’s Seoul correspondent Brian Padden was there and reports the soldiers were well disciplined both in conducting a complex live fire exercise and in staying on message with the press.
Video

Video Space Program Status Disappoints 'Last Man on the Moon'

One of the films that drew big crowds last week at the annual South by Southwest festival in Austin, Texas, tells the story of the last human being to stand on the moon, U.S. astronaut Eugene Cernan. It has been 42 years since Cernan returned from the moon and he laments that no one else has gone there since. VOA’s Greg Flakus reports.
Video

Video Young Filmmakers Shine Spotlight on Giving Back

A group of student filmmakers from across the United States joined President Barack Obama at the White House this month for the second annual White House Student Film Festival. Fifteen short films were officially selected from more than 1,500 entries by students aged 6 through 18. The filmmakers and their families then joined the president and a group of celebrities for a screening of their films. VOA’s Julie Taboh reports.
Video

Video VOA Exclusive: Interview with Afghan President Ashraf Ghani

Afghan President Ashraf Ghani, during his first visit as president to Washington, gave a one-on-one interview with VOA Afghan Service reporter Said Suleiman Ashna, about his request for a change in U.S. troop levels, the threat from the Islamic State, and repairing relations with the United States and Pakistan. The interview was held at Blair House, late Sunday, in Pashto.
Video

Video California Science Center Tells Story of Dead Sea Scrolls

The ancient manuscripts were uncovered in the mid-20th century, and they are still yielding clues about life and religious beliefs in ancient Israel. As VOA's Mike O'Sullivan reports, an exhibit in Los Angeles shows how modern science is bringing the history of these ancient documents to life.
Video

Video Angelina Jolie Takes Another Bold Step

Hollywood actress and filmmaker Angelina Jolie has revealed she had her ovaries and fallopian tubes removed to lower her odds of getting cancer. Doctors say the huge publicity over her decision will help raise awareness about the importance of cancer screening. VOA’s George Putic has more

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More