Turkey has been forced to grapple with difficult economic conditions over the past year. Through it all, the debt management office has been a rock of professionalism. August 2018 brought one of the sharpest and most severe currency crises in Turkey’s history. Despite this, it returned to the debt market in October, raising $2bn with a five year bond.
Had Turkey been too aggressive in its attempt to keep its interest rate burden down, investors might have rebelled, shutting the country out of the international debt market, and sending its bonds into a spiral as it scrambled for cash. As it was, Turkey showed that investors were prepared to lend it money and, in doing so, opened a path for Turkey’s banks and agencies to return to the market as well.
Turkey’s difficulties did not end in August. Investors around the world were puzzled by the central bank’s decisions on monetary policy and its reluctance to raise rates to combat inflation. Diplomatic relations with the US became strained, thanks to Turkey’s decision to purchase the S-400 missile system from Russia, which resulted in Turkey’s expulsion from the F-35 programme.
Despite the frosty diplomatic backdrop, Turkey went from strength to strength in the bond market, returning for euros in November 2018 and raising a combined $6.7bn in 2019, tapping euros, dollars and the sukuk markets.
Throughout a period of remarkable volatility, Bülent Aksu Bey and his team have shown an unerring instinct for knowing how investors will react, enabling them to make use of the best available windows to fund.