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

Islamic State Survivor: A Yazidi Girl's Tale

Sarah Said Haydar, captured a year ago while fleeing Islamic State onslaught in northern Iraq, was so traumatized by militants, she sought to end her own life More

EU, US Applaud Kosovo Law on Special Court

Joint statement says lawmakers' decision to address allegations of war crimes 'demonstrated their commitment to the rule of law and to honor international agreements' More

ASEAN Ministers to Push for S. China Sea Agreements

According to documents obtained by VOA Khmer, ministers will stand up for 'freedom of navigation, unimpeded lawful maritime commerce, trade and over flight' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Cambodia Makes Progress Curbing Bear Tradei
X
Robert Carmichael
August 04, 2015 3:07 PM
Cambodia’s wild bears are under unprecedented pressure. Their native forests are being cut down at record rates, and China's huge demand for traditional medicine has made them targets. But experts say Cambodia's conservation efforts are setting an example that has put it well ahead of its neighbors in protecting bears. Robert Carmichael reports for VOA from Phnom Penh.
Video

Video Cambodia Makes Progress Curbing Bear Trade

Cambodia’s wild bears are under unprecedented pressure. Their native forests are being cut down at record rates, and China's huge demand for traditional medicine has made them targets. But experts say Cambodia's conservation efforts are setting an example that has put it well ahead of its neighbors in protecting bears. Robert Carmichael reports for VOA from Phnom Penh.
Video

Video Growing Number of E. Jerusalem Palestinians Seek Israeli Citizenship

Most Palestinians living in East Jerusalem have long rejected the option of full Israeli citizenship, seeing it as a betrayal to their political cause - the formation of a Palestinian state with East Jerusalem as its capital. But as that dream remains elusive, more and more Palestinians are applying for Israeli citizenship. Zlatica Hoke reports the decision is hard for many Palestinians who say they have to be pragmatic about it.
Video

Video With No Money, More Students, African Universities Struggle

Academics from around the African continent converged in Johannesburg last week for the African Universities Summit, a chance to tackle some of the major issues facing higher education in Africa today. VOA's Anita Powell reports from Johannesburg.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Wisconsin's Voter ID Law Still Mired In Controversy

Voter ID laws have sparked controversy across the US. More than 30 states enacted laws requiring citizens to show identification before they vote. Against fierce opposition, the state of Wisconsin recently enacted one the most restrictive voter ID laws in country. As Jeff Swicord reports, no one can predict its impact as the 2016 election nears.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Ebola Vaccine Hailed as Highly Effective

At last, there's a way to end the suffering from the Ebola epidemic that has ravaged West Africa for more than a year. Researchers say the vaccine is so effective, there may never be a major outbreak of Ebola again. VOA's Carol Pearson reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs