Fitch Predicts Perpetuated Economic Contraction for Turkey

A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer
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Fitch Predicts Perpetuated Economic Contraction for Turkey

A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer
A money changer counts Turkish lira banknotes at a currency exchange office in Istanbul, Turkey August 2, 2018. REUTERS/Murad Sezer

The international credit rating agency Fitch Ratings predicted a continued economic contraction in Turkey for 2019 citing the government’s inability to carry out needed adjustments in the aftermath of the Turkish Lira losing over 30 percent of its value against the dollar.

In a statement, Fitch Ratings underlined that "any early monetary easing" risks revamped pressure on the lira at a time any noteworthy slowdown threatens to break down Turkey's commitment to regulate public finance.

The striking depreciation of national currency, with the lira falling to its lowest levels against the dollar in 2018, and inflation surging to a 15-year high last November has not only served a severe blow to Turkey’s economy, but also prompted the central bank to raise interest rates by 11.25 percentage points, leaving many companies unable to pay back foreign currency loans.

In 2018, the Turkish economy contracted by 3 percent.

The lira plunging more than 4 percent against the US dollar on Friday, and continuing a downward performance on Saturday that saw it shed an added 7 percent has forced the country’s Central Bank to suspend one-week repo auctions in an attempt to squeeze liquidity in the market.

Concerned with the central bank’s ability to curb inflation in the face of calls from President Recep Tayyip Erdogan for lower borrowing costs, investors were demotivated.

That sell-off, which tipped the economy into recession in the fourth quarter, was exacerbated by strained ties between Ankara and Washington over the trial of a US evangelical pastor in Turkey.

In light of the slowdown of economic growth and depreciating currency, the Turkish Treasury resorted to borrowing $1 billion through its dollar-denominated April 2029 bond.
The bond has a coupon rate of 7.625 percent and a yield to investors of 7.15 percent.

“The offering attracted an orderbook of approximately 3 times the actual issue size from more than 100 accounts,” the Treasury and Finance Ministry said in a statement on its website on Saturday.

The ministry had mandated Goldman Sachs, JP Morgan ve Standard Chartered for the reopening of its US dollar-denominated bond issue.

Some 39 percent of the bonds were sold to investors in the US, 34 percent in the UK, 17 percent in Turkey, 7 percent in other Europe, and 3 percent in other countries.

“The total amount of the US dollar bond issuance was converted into an equivalent EUR liability. As a result of this swap transaction, EUR denominated coupon rate was realized as 4.859 percent and the EUR equivalent yield to the investor was realized as 4.381 percent,” the statement added.

The proceeds of the issue will be transferred to the Treasury’s accounts on March 26.

With this transaction, the amount of funds that have been raised from the international capital markets as part of the $8 billion worth of 2018 Eurobond issuance program has reached $6.4 billion.



King Khalid International Airport Ranks 24th Globally in Skytrax 2025 List

A Saudi man checks the flight timings at the King Khalid International Airport in Riyadh, Saudi Arabia, May 16, 2021. REUTERS/Ahmed Yosri
A Saudi man checks the flight timings at the King Khalid International Airport in Riyadh, Saudi Arabia, May 16, 2021. REUTERS/Ahmed Yosri
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King Khalid International Airport Ranks 24th Globally in Skytrax 2025 List

A Saudi man checks the flight timings at the King Khalid International Airport in Riyadh, Saudi Arabia, May 16, 2021. REUTERS/Ahmed Yosri
A Saudi man checks the flight timings at the King Khalid International Airport in Riyadh, Saudi Arabia, May 16, 2021. REUTERS/Ahmed Yosri

Riyadh Airports Company (RAC), which manages and operates King Khalid International Airport, announced that the airport achieved 24th place in Skytrax's 2025 World Airport Awards — climbing 11 spots from the previous year and ranking highest among Saudi airports in the global survey of 580 airports, SPA reported.
The announcement was made during the Passenger Terminal Expo held in Madrid, Spain, from April 8 to 10.
The airport won Skytrax's 2025 "Best Airport Staff” in the Middle East award, ranked third for “Best New Airport Terminal” globally, and secured fourth place in the "Best Airport Worldwide” 30-40 million passengers category. The awards were presented by Skytrax, the global organization evaluating airlines and airports since 1999.
RAC chief executive Ayman bin Abdulaziz AboAbah described the airport’s advancement to the higher ranking as the most significant achievement of the year, considering it a testament from passengers and users who experienced its services across hundreds of arriving and departing flights.