Turkish Finance Minister Mehmet Şimşek and Central Bank Governor Hafize Gaye Erkan will travel to New York this week to hold an Investor Days event on January 11 where they will try to woo foreign investors back to Turkey, according to the central bank and Turkish media.
Erkan, a former Wall Street banker and the first woman to lead Turkey’s central bank, will deliver a full day of presentations to foreign investors on monetary policy, inflation and Turkish assets, while Şimşek will also give a presentation on fiscal policy and the financing outlook, according to an invitation the central bank sent to investors.
The event, which will take place at the headquarters of Wall Street bank JPMorgan, is seen as part of Ankara’s efforts to attract foreign investors back to Turkey after years of exodus.
More than 200 senior executives from investment funds are expected to attend the event, following which Erkan will take questions, discuss policy and the inflation outlook and moderate a panel discussion on “Investors’ View on Turkish Assets,” according to the central bank’s invitation.
Well-respected economist Şimşek was appointed finance minister and Erkan was put in charge of the central bank following the elections in May when President Recep Tayyip Erdoğan secured yet another term in power.
The new economic team implemented a program and began to increase interest rates in a major economic policy reversal. Boosting foreign investment is a key part of the plan, and there are early signs of interest.
The new policy also aims to bring down soaring inflation, reduce trade deficits, rebuild foreign exchange reserves and stabilize the lira.
The central bank has since lifted Turkey’s benchmark interest rate to 42.5 percent from 8.5 percent, breaking through Erdoğan’s past aversion to high borrowing costs.
In an unexpected move on November 30, S&P Global Ratings revised Turkey’s sovereign credit outlook to positive from stable on subsiding twin deficits and affirmed its rating at “B.”
The move came outside of a strict ratings calendar, and S&P said the deviation complies with recent policy adjustments including a 10 percentage point hike in the central bank’s benchmark rate to 40 percent as well as “the monthly current account surplus posted in September, and the recovery in usable reserves during the first 17 days of November.”
A “B” rating is five notches below investment grade. The positive outlook indicates a possibility of an upgrade but is not tied to a timeline.
S&P’s move has been interpreted as a sign that new economic team is on the right track to again make Turkey attractive to foreign investors.
