Morning Commentary: Buyers emerge in CEE/MEA as Turkey seeks to soothe investors

By Rebecca Melvin

New York, Aug. 16 – There were mostly buyers of debt in the Central & Eastern Europe, Middle East and Africa region on Thursday as Turkey’s finance minister, Berat Albayrak, told investors that the government would support the banking sector if necessary but that the banks were strong enough to weather recent volatility.

Albayrak held a call with about 5,000 investors starting at 10 p.m. ET. The new finance minister, who is president Recep Tayyip Erdogan’s son-in-law, also said there had been no major flow out of deposits and that the country had no plans to seek help from the International Monetary Fund.

There were “generally buyers today,” a London-based trader, focused on the Middle East and Africa, said when asked about the market’s response to Albayrak. “Spreads are doing OK and the lira is 5.73 area.”

The lira’s level represented about a 3% improvement on the day and is the third straight gain the currency has notched since hitting a low of 7.24 to the U.S. dollar on Monday.

According to reports, Albayrak also said that the government would cut expenditures and that revenues were positive, predicting a surplus of about 6 billion lira, or $1 billion, by the end of the year.

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