Deputy PM talks down external debt fears

ANKARA (AA) – Turkey does not expect to experience difficulties about any rollover of the country’s external debt, Deputy Prime Minister Mehmet Simsek said on Thursday.

Speaking in a TV interview following the declaration of state of emergency after Friday's failed putsch, Simsek said that Turkey’s economic base is solid and had repeatedly surprised the authorities with its resilience in times such as global economic crisis and geopolitical rifts.

“A significant part of this debt is related to finance of trade, which means being in debt to companies who sell goods to us on credit. Will they quit selling goods to us? This is important,” Simsek said.

“Secondly, there are financial institutions with which Turkish banks have had relations for a very long period. Will they quit relations all of a sudden?” Simsek added.

After Standard & Poor’s downgraded Turkey’s credit rating one notch – triggering fears of significant capital outflow – Simsek said due to credit rating agencies’ decisions, credit costs may edge up and Turkish companies may find external borrowing as profitable as before.

Simsek said the government would “prioritize the reforms aimed at increasing domestic savings, which means we will reduce dependence on external finance”.

Considering the state of emergency declared yesterday and its possible effects on the economy and the lives of ordinary people, Simsek said the measures would solely focus on those who took part in Friday's failed coup attempt.

Saying the state of emergency is aimed at bringing coup plotters “swiftly” to justice, Simsek added: "The lives of ordinary people and the economy will go uninterrupted. It will be business as usual and emergency powers will not be abused.”

Simsek's comments come after Turkey announced Wednesday a nationwide three-month state of emergency after a failed coup which martyred hundreds and injured more than 1,500 people last week.