Turkish banks meet debt payments amid crisis
The head of Turkey's banking watchdog said Saturday that all banks had succeeded in meeting their financial obligations despite a severe liquidity crisis which forced the government to float the lira.
"As of yesterday (Friday), there are no banks with a deficit," said Zekeriya Temizel, who heads the board of banking regulation and control, quoted by the Anatolia news agency.
"All banks have met their obligations, especially those to banks abroad," he added. Temizel's remarks came in the wake of the Turkish lira's 36.1 percent slump against the dollar since Thursday when the government abandoned a currency peg and let the lira float to contain a cash crunch battering the financial markets.
Analysts have said that the move would cause massive damage to banks, which have large foreign currency debt and stocks of government bonds in Turkish lira.
Domestic dealers, on the other hand, speculated that the state might have to seize some banks, which were crushed by the cash shortage, while interest rates were running at an average of 2,000 percent. But Temizel denied Saturday that the situation of some banks was dire enough to require his board's intervention. “It is treason to the economy to spread rumours that there are institutions which need to be taken outside the system when there are none," he said.
The board of banking regulation and control has taken over the running of 11 banks since December 1999, when parliament passed a law aiming to align the banking system with international standards and install a strict monitoring mechanism. Turkish Economy Minister Recep Onal met with the managers of several banks here Saturday to discuss ways to inject calm into the turbulent money markets.
The recent financial turmoil, which began on fears of political stabilty, came as the 81-member banking system was slowly recovering from a similar liquidity squeeze which Turkey was able contain through a $10 billion rescue package from the International Monetary Fund (IMF). —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
- Backfiring? Turkish Lira hits record low amid media crackdown, Russia concerns
- Turkish leaders discuss new steps on finance crisis
- Aggressive debt management with IMF and Parliament blessings
- Turkish markets stabilize after costly damage from political crisis
- An impending mortgage crisis in Israel? Well, the central bank can already envision one