COVID-19 and Trump’s indifference helped human rights abusers in 2020
Durov rejects Western funds’ offer to buy 5%-10% of Telegram with $30bn valuation
Belarusian government sees $2bn of withdrawals, issues $580mn worth of bonds in 2020
Lukashenko: I am no enemy of the people
One of Russia’s biggest wood product companies, Segezha could be Sistema’s next IPO
The volume of the Russian National Wealth Fund tops $183.93bn as gold overtakes dollar asset for first time
New Ukrainian VC firm QPDigital aims to invest up to $100 million in digital startups
EBRD investments reach record €11bn in pandemic-struck 2020
FPRI BMB Ukraine: Most Ukrainians are optimistic about 2021 – poll
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Estonian premier quits after Tallinn development scandal
Top Centre Party official suspected of corruption in Tallinn real estate scandal
Czech Pirates and Mayors approve final coalition agreement for 2021 elections
OUTLOOK 2021 Czechia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
Romanian tech entrepreneurs expand into banking sector
OUTLOOK 2021 Hungary
Hungarian government remains silent after Capitol riots
Storming parliaments: New Europe's greatest hits
World Bank expects modest recovery for Europe and Central Asia in 2021
FDI inflows to CEE down 58% in 1H20 but rebound expected
OUTLOOK 2021 Slovakia
Slovakia to invest €1.2bn in digitisation
BALKAN BLOG: The controversial recipe for building up Albania
Heavy flooding causes chaos in parts of Southeast Europe
Vodafone Albania plans €100mn infrastructure investments after AbCom merger
OUTLOOK 2021 Albania
Kyiv accuses Bosnian President Dodik of lying about icon gifted to Russian foreign minister
Bosnia’s real GDP contracts 6.3% y/y in 3Q20
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
ING THINK: Growth in the Balkans: from zero to hero again?
OUTLOOK 2020 Bulgaria
Labour demand down 28% y/y in Croatia in 2020
Zagreb Stock Exchange's Crobex10 index at highest level since March 5
OUTLOOK 2021 Kosovo
Arrera Automobili aims to launch Albania’s first supercar
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Moldova’s PM resigns to prepare the ground for early elections
Socialist lawmakers in Moldova scrap settlement on $1bn bank frauds
Montenegro’s new ruling coalition carves up top state jobs
OUTLOOK 2021 Montenegro
Vast tide of floating waste threatens Balkan hydropower plants
North Macedonia's manufacturing confidence indicator down by 8.5 pp y/y in December
OUTLOOK 2021 North Macedonia
Transparency International warns of high corruption risk in CEE defence sectors
Moldova fears flooding from Ukraine's planned Dniester hydropower plants
Romania’s industrial recovery paused in November
OUTLOOK 2021 Serbia
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
Slovenia’s dire COVID-19 situation in 4Q20 caused second economic dip
Slovenia’s Eligma completes €4mn funding round
Turkish opposition leader lawsuit demands one lira from Erdogan, police probe “bald” interior minister posts
Akbank takes over Istanbul's Palladium Atasehir shopping mall
OUTLOOK 2021 Armenia
Armenia’s PM cautions conflict with Azerbaijan “still not settled” after trilateral meeting with Putin
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
Russia, Kazakhstan pushing for oil production increases on the back of coronavirus vaccine-fuelled oil price optimism
OUTLOOK 2021 Georgia
Georgia’s political kingpin Bidzina Ivanishvili quits politics
Modern-day “Robin Hood” inspires Georgians drowning in debt
Iran’s navy conducts missile drill while analyst argues Trump even capable of nuclear strike in final days
TEHRAN BLOG: Who’s more credible? Johnson backing Trump’s Nobel chances or Iran applauding arrest warrant for US president?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
OUTLOOK 2021 Kyrgyzstan
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
Mongolia in lockdown after suffering first local coronavirus transmissions
OUTLOOK 2021 Tajikistan
China business briefing: Not happy with Kyrgyzstan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
Turkmenistan: The dammed united
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
OUTLOOK 2021 Uzbekistan
Uzbekistan’s Makro positions itself for growth in a more competitive market
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Retail and commercial borrowers’ payment delay requests regarding payments until end-2020 must be met by the lenders, the Turkish banking watchdog BDDK told local lenders on July 8 in its latest letter of instructions.
The existing loan limits should not be blocked without justified and concrete reasons, and care should be taken to keep the loan limits ready for use, the 11-article instructions also said.
It has also requested convenience for credit card fees and demanded that the credit card fee collection should be temporarily delayed in line with the demands of customers.
Lastly, banks’ precautionary measures on restricting credit card limits and closing credit cards to cash withdrawals should not be stricter than the rules specified in the legislation.
On July 9, the BDDK released a separate ruling to increase the maximum limit for credit cards for customers who cannot declare their income to TRY2,000 from TRY1,300.
Additionally, banks will not close credit cards where the minimum payment amount is not paid three times in a calendar year until end-2020.
Also on July 9, the regulator fined seven banks a total of TRY205mn (around $30mn) after individual and institutional customers made complaints.
“The inquiry process regarding customers’ complaints is ongoing,” it said in a statement.
In May, the watchdog imposed fines totalling TRY102mn on 18 banks after examining complaints by customers.
On July 11, President Recep Tayyip Erdogan authorised the central bank to obtain real time data from local lenders.
The central bank, the BDDK banking watchdog, the SPK capital markets board and the trade ministry separately issued new regulations along with amendments to existing regulations with an impact on banking.`
The BDDK has employed a proactive perspective in introducing around 50 regulations since the beginning of the coronavirus (COVID-19) outbreak, Mehmet Ali Akben, head of the regulator, said on June 14.
His figure does not include regulations or regulatory amendments introduced by other authorities, while the overall list of regulatory forbearance instances since 2016 would deserve a PHD thesis.
Local lenders assign zero weight to their FX receivables from the Treasury and the central bank although Turkey is rated at deep junk by all rating agencies.
Moreover, they calculate their FX assets at the 2019 exchange rate and they do not write defaulted loans as non-performing loans (NPL) though they regularly restructure them.
On July 2, Reuters quoted seven unnamed industry sources as saying that some Turkish banks are reportedly concerned that a “bad bank” plan to house billions of dollars of NPLs could require them to book large losses.
Additionally, the government announced some capital hikes at state lenders but media reports overlooked that the “capital hikes” in question were performed through exchanging some government papers among the Turkey Wealth Fund (TVF), the unemployment fund and state banks.
The overriding idea is that the government wants more loan growth when it comes to both individuals and firms.
The lenders are also obliged to comply with a recently introduced “asset ratio”.
“Will we be looking back nostalgically at the time of COVID-19 which, like my optimism about EM sales-trading, will seem like a distant memory or will we still be in the thick of it? The latter scenario seems far more plausible and if not the disease itself then the consequences of it which I suspect we will live with years, especially the financial,” Julian Rimmer of Investec wrote on July 10 in an emailed note to investors.
“It's possible to envisage for example, that by autumn, Turkey to be in the middle of a fully-fledged currency crisis, Russia to be sanctioned and cut off from Swift and South Africa to hurtling headlong into economic distress. These may be the worst-case scenarios but they are more likely to be the eventual outcome than any best-case scenario you can conjure up,” he added.
“In Turkey, one of the local brokers to whom I speak sent me the following message today, 'regulators raised the minimum credit card limit to be approved by a bank from TL1,300 to TL2,000 (Neutral).' Yes, you read that correctly, the MINIMUM cc limit not the maximum and yes, the broker felt obliged to tell me its impact was neutral as opposed to really, really … negative,” he also wrote.
“I'm going to Turkey next week and since I have a Turkish bank account, I see no reason why they won't give me some flexible plastic and allow me to blow few grand on it and then just bugger off and leave someone else to socialise the debt,” he wrote.
“The macro coming out of Turkey is starting to take on ominous dimensions again. The credit boom is a result of pressure on the banks by the govt to keep the economy moving and can only end in disaster. Whether the banks pick up the bill for imprudent lending or the govt, the consequences for the country as a whole are the same… encouraging banks to lend imprudently into [consumption] will mean a financial reckoning at some point,” Rimmer wrote.
“I feel another period of lira weakness is looming. I read yesterday, 'The combination of a big policy push for banks to lend out to the private economy and sharply rising government funding needs has pushed total domestic credit and lira broad money growth to more than 40% y/y'. I have limited formal economic knowledge but enough to know that sounds like a recipe for 'Add Weirdogan — instant $hitshow',” he concluded.
“Buoyed credit growth in the coming months, helping to support the fledgling EM recovery. But this may come at the cost of a further misallocation of resources in the likes of China and Turkey,” Edward Glossop of Capital Economics wrote on July 8 in a research note.
“Robust cross-border banking sector flows have helped to support lending in countries where sectors are dependent on external financing (notably Turkey),” he added.
“While robust credit growth during the crisis is — overall — a good thing, it could create problems further out. It will exacerbate the misallocation of resources in China, which will constrain potential growth there. A similar problem is brewing in Turkey. With policymakers funnelling credit into unproductive sectors, this could create long term economic distortions which will be difficult to unwind,” he concluded.
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