ANKARA: Turkey should get rid of a hurricane as firms rush to restructure their foreign debts with the country’s banks, Ahu Özyurt said in an analysis for Hürriyet newspaper, citing an investment analyst.
“Once the door opens, everyone wants to jump in” Kocabalkan said in reference to an expected rush by companies to restructure their debts. “This can become a trend, which can turn into a deadly spiral for banks. We should all really get ready for a hurricane.”
Turkish companies have about $230 billion of foreign loans that are not covered by assets, making them susceptible to a sudden reversal in funds into emerging markets or a slide in the value of the lira against the dollar. The lira slumped to a record low against the dollar and euro this week, increasing concern that some companies will default on their repayments. Many small and medium-sized firms in Turkey have also taken out such loans, though data is not publicly available.
Emergency rule in Turkey is also weighing heavily on the investment climate, meaning foreign companies are not entering into partnerships with local investors and Turkish firms are having problems rolling over their liabilities.