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

Turbulent Transition Imperils Tunisia’s Arab Spring Gains

Critics say new anti-terrorism laws worsen Tunisia's situation while others put faith in country’s vibrant civil organizations, women’s movement More

Burundi’s Political Crisis May Become Humanitarian One

United Nations aid agencies issue warning as deadly violence sends tens of thousands fleeing More

Yemenis Adjust to Life Under Houthi Rule

Locals want warring parties to strike deal to stop bloodletting before deciding how country is governed More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Texas Town Residents Told to 'Just Leave' Ahead of Flood Threati
X
Greg Flakus
May 29, 2015 11:24 PM
Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video Texas Town Residents Told to 'Just Leave' Ahead of Flood Threat

Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video New York's One World Trade Center Observatory Opens to Public

From New Jersey to Long Island, from Northern suburbs to the Atlantic Ocean, with all of New York City in-between.  That view became available to the public Friday as the One World Trade Center Observatory opened in New York -- atop the replacement for the buildings destroyed in the September 11, 2001, attacks.  VOA’s Bernard Shusman reports.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs