Turkey’s Albayrak says central bank independent, sees no crisis in banking sector

Turkish Treasury and Finance Minister Berat Albayrak says dispute with US not benefiting ‘US state or people.’ (Yasin AKGUL/File/AFP)
Updated 03 September 2018
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Turkey’s Albayrak says central bank independent, sees no crisis in banking sector

  • Berat Albayrak said he did not expect any problems in the banking sector
  • The lira has fallen some 40 percent against the dollar so far this year

ISTANBUL: Turkey’s central bank is independent of government and will take all necessary steps to combat inflation, Finance Minister Berat Albayrak told Reuters, defending an institution that has not raised its benchmark rate in nearly three months despite a currency crisis.
Albayrak also said he did not expect any problems in the banking sector, in stark contrast to recent warnings from ratings agencies that the lira sell-off could weaken lenders’ assets. In the event of a problem at banks, Ankara would be willing to step in with support, he said.
The lira has fallen some 40 percent against the dollar so far this year, hit by concerns about President Tayyip Erdogan’s control over monetary policy and a worsening diplomatic rift with the United States.
Economists say the central bank needs to hike rates decisively to rein in double-digit inflation and support the currency. Erdogan, a self-described “enemy of interest rates,” wants low rates to keep a credit-fueled growth boom going.
“The central bank in Turkey has been maybe more independent than those in other countries,” Albayrak, Erdogan’s son-in-law, said in an interview at a 19th century mansion overlooking the Bosphorus in Istanbul. The bank will take steps “to continue this independence,” he said.
Turkey has reached a point where it requires a “full-fledged fight against inflation,” Albayrak said.
The central bank, which holds its next meeting on Sept. 13, said on Monday it will adjust its monetary stance given “significant risks” to price stability, a rare move to calm markets after inflation surged to its highest in nearly fifteen years.
At its last meeting in July, the central bank left rates on hold, confounding market expectations and sending the lira sharply weaker.
It plunged as low as 7.24 to the dollar in mid-August. On Monday it traded at 6.62 at 1109 GMT, around 1 pct weaker on the day.
Albayrak’s appointment two months ago as treasury and finance minister has cemented the perception that the economy and monetary policy are now fully under Erdogan’s control.
Christian pastor
Albayrak was visiting London on Monday for talks with Britain’s finance minister Philip Hammond, part of Turkey’s efforts to strengthen relations with Europe’s main economic powers as a dispute with Washington shows no sign of easing. He was in Paris last week and will go to Germany next week.
Relations with the United States, a NATO ally and major trading partner, have soured over a series of issues including Turkey’s detention of an American Christian pastor on terrorism charges and the US sentencing of an executive from Turkish state bank Halkbank for busting sanctions on Iran.
Adding to the friction, the US Treasury is investigating Halkbank for violating Iran sanctions. The bank has said all of its transactions were legal.
Turkey hired a US law firm to look into Halkbank’s dealings with Iran and found that it did not violate US sanctions, Albayrak said, adding Ankara does not expect the bank to face any fine.
“As a result of a months-long independent examination, it has been established that the bank had not violated primary and secondary US sanctions against Iran,” he said.
Referring to Turkey’s wider dispute with the United States, Albayrak said Washington had taken it to a point that did not benefit “the US state or people.”
Bad debt
For years, Turkish firms have borrowed in dollars and euros, drawn by lower interest rates. The currency slump has driven up the cost of servicing that debt and investors fear that banks could now be hit by a wave of bad loans.
Around $179 billion of Turkey’s external debt matures in the year to July 2019, according to JPMorgan estimates. Most of that — around $146 billion — is owed by the private sector.
Ratings agencies Moody’s and Fitch both sounded alarm about the outlook for banks last week, with Fitch estimating that banks’ foreign-currency lending now stood at around 43 percent of all loans.
“I have no reason to be worried at this stage. But we are aware how important the banking sector is. We are in a close coordination and cooperation with our banks and the (banking watchdog) BDDK,” Albayrak said.
“We are not expecting any problems in the banking sector, but in case of a problem, we will support them in every way.”
He also dismissed concerns about debt, including in the private sector. He said the current account deficit will be “considerably below” forecasts by year-end and “much stronger” in 2019. (Additional reporting by Tuvan Gumrukcu, Ece Toksabay and Humeyra Pamuk; Writing by David Dolan and Dominic Evans; Editing by Toby Chopra)


Workplace messaging startup Slack to list on Wall Street

Updated 26 April 2019
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Workplace messaging startup Slack to list on Wall Street

  • The direct listing will raise no cash for the California-based firm but will enable employees and early investors to sell their shares in the fast-growing tech firm
  • Slack, which has become a popular application for businesses looking to move away from email to real-time messaging, said it had some 10 million users at the end of January

WASHINGTON: The workplace messaging startup Slack filed documents Friday to list its shares on the New York Stock Exchange, the latest of a group of richly valued tech enterprises to look to Wall Street.
The “direct listing” will raise no cash for the California-based firm but will enable employees and early investors to sell their shares in the fast-growing tech firm.
Slack, which has become a popular application for businesses looking to move away from email to real-time messaging, said it had some 10 million users at the end of January.
That included 88,000 paying customers and 65 of the Fortune 100 firms.
“Our vision is to make people’s working lives simpler, more pleasant and more productive,” Slack said in its filing with the Securities & Exchange Commission.
“Slack is a new layer of the business technology stack that brings together people, applications, and data — a single place where people can effectively work together, access hundreds of thousands of critical applications and services, and find important information to do their best work.”
Slack, which has users in 150 countries, has raised more than $1 billion from investors with the latest round valuing the company at $7.1 billion, making it one of the most richly valued “unicorns” — startups with private funding worth at least $1 billion.
In its first release of financial data, Slack said it lost $141 million in the 12 months to January 31 on revenue of $400 million.
Created in 2013, Slack has been a leader in the new segment but faces competition from the likes of Microsoft, Facebook and others offering workplace collaboration tools.
Analysts say Slack has found a niche, especially among small- and medium-sized businesses.
Its clients include software giant Oracle, the French luxury goods maker LVMH, Liberty Mutual insurance and the NASA Jet Propulsion Laboratory.
It is available in eight languages and gets about one-third of its revenue from outside the United States.
Slack’s chief executive and founder Stewart Butterfield was part of the team that started the photo-sharing service Flickr.
The direct listing, which was also used by the streaming music giant Spotify, does not add fresh capital to the firm but enables free trading of shares while avoiding the underwriting costs of a public offering.
Slack will trade under the symbol “SK.”