Turkish banks remain strong, measures working – Akbank CEO

by

ISTANBUL (Reuters) – The Turkish banking sector remains strong and liquid, and measures taken to support markets and the ailing lira have started to have an impact, the chief executive of Akbank <AKBNK.IS> said on Wednesday.

To shore up the lira <TRYTOM=D3>, which has lost about 40 percent against the dollar this year, Turkey’s banking watchdog has limited foreign currency swap transactions. The central bank has also pledged to provide liquidity, and cut lira and foreign currency reserve requirements for Turkish banks.

Akbank chief Hakan Binbasgil said the capital adequacy ratio of the banking sector was at around 16.3 percent at the end of June, far above legal limits.

The Turkish banking sector has a high capital adequacy ratio that would endure shocks,” he said in a statement. “There was no significant withdrawal of deposits, no panic,” he said, adding that the banks were prepared.

Economists and ratings agencies have expressed concern over the damage that the lira’s depreciation can cause. Last week, investment bank Goldman Sachs warned that further lira weakness could largely erode Turkish banks’ excess capital buffers.

President Tayyip Erdogan has called on citizens to convert their hard currency and gold into lira to protect the Turkish currency from an economic attack.

“The customers selling foreign currency were three times more than the customers buying foreign exchange on Tuesday,” Binbasgil said.

The Turkish currency’s fall has been driven by worries about Erdogan’s growing influence over the economy and his repeated calls for lower interest rates, despite high inflation.

A diplomatic rift between Ankara and Washington, which has led to sanctions and additional import tariffs imposed by both sides, provoked the latest selloff.

Read more >>Qatar to invest $15 billion in Turkey; source says banks the focus

You may also like

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: