ECC Announcements: It's All About Growth and Credit

TURKEY - In Brief 08 Dec 2016 by Murat Ucer
PM Binali Yildirim made the much-awaited announcements today on the measures that were decided at last Friday's Economic Coordination Council. The measures, the details of which we shall report further in due course, essentially target improving credit access for the private sector, particularly the SMEs -- through a number of mechanisms such as increasing the capital of the Credit Guarantee Fund -- and hence, are fundamentally about stimulating growth. PM Yildirim said that this is the first of a series of announcements. Today's measures did not include (which is, in our view, "good news") some of the more awkward and counter-produtive measures that the media had speculated about during the week, like securitization of mega-project credits by banks; or initiating a CBRT deposit facility to attract the deposits of Turks living abroad.As such, the market impact of today's announcements should be neutral at best, but most likely negative.

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