Turkey’s central bank meets amid economic fragility, war of words with the US
Turkey’s central bank will meet today to discuss transferring 2018 profits to the treasury. The gathering comes three months ahead of schedule.
It is expected that the Turkish Central Bank will transfer $6.7 billion to the treasury, which owns 55% of the central bank. Following President Donald Trump’s threat to economically “devastate” Turkey should it decide to attack Kurdish forces in Syria after US forces are removed, the move will likely reduce Ankara’s borrowing expenses.
Without American and Syrian Democratic Forces in Syria, a resurgence of the Islamic State becomes more likely. While Trump has not specified details of his economic threat, the Turkish lira reduced by 1.6% against the US dollar on Monday. This is another setback following the lira’s almost 30% decline in 2018.
If Trump does sanction Ankara over its policy on Syria’s Kurdish forces, Turkey will rely heavily on its cash reserves to try to cushion the blow of any American sanctions.
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