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Liraization Drive Picks Up as Regulator Tweaks FX Loans

TURKEY
  • Dunya reports that the banking regulator has cut the risk-weighting of FX-denominated commercial loans in order to prevent FX purchases with loans made in TRY. Banking sources noted that this policy measure was likely part of the government’s preference for Liraization.
  • Further signs of a deterioration of Western-Turkish relations in this weekend’s Aydinlik, where Erdogan was cited as saying that US military bases in Greece pose a threat to Turkey. This follows comments from the Turkish foreign minister last week, who warned Greece against exceeding limits on military presence in the Aegean Sea. Cavusoglu told Hurriyet that “we are extremely serious, we are not bluffing”.
  • The tourism sector is expected to suffer markedly this year, with the mayor of Kemer expecting tourist numbers to decline by 50% in the region, according to Sozcu.
  • Erdogan is scheduled to speak today, appearing at the Court of Accounts at 2pm local time (1200BST / 0700ET).

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