Turkey triples Qatar currency swap line to $15 billion

Turkey triples Qatar currency swap line to $15 billion
2 min read
Turkey has turned to Gulf ally Qatar to secure much-needed currency amid economic pressure from the coronavirus crisis.
Turkey ran down its hard currency buffers earlier this year [Getty]

Turkey has tripled its currency swap agreement with Qatar to $15 billion equivalent, securing desperately-needed foreign exchange after it ran down its hard currency buffers this year.

The Turkish central bank said the adjustment to the swap agreement, which previously stood at $5 billion, aimed to facilitate bilateral trade and support the two states' economic stability.

Prior to the coronavirus crisis, Turkey was recovering from its first recession in a decade. The economy now appears to be the brink again, with President Recep Tayyip Erdogan running out of options.

With the risk of mass unemployment, a collapse of the tourism sector and an unstable currency, "the situation is extremely bad", said Atilla Yesilada, an economist at GlobalSource Partners think tank told AFP.

Erdogan unveiled a stimulus package in March before the virus hit Turkey hard, infecting more than 150,000 people, but critics say the $15 billion plan is insufficient.

With the daily coronavirus death toll now falling, Erdogan recently announced a gradual lifting of restrictions in May and June to spur the world's 19th largest economy.

Ankara has avoided implementing a stricter nationwide lockdown over the course of the crisis, a move analysts say is motivated by a desire to keep an already hard-hit economy afloat.

Turkey's annual gross domestic product (GDP) amounts to about $770 billion.

Economists, nonetheless, forecast a painful second recession, and some say Erdogan will have to seek help from the International Monetary Fund (IMF), an option he has always rejected.

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