Turkish President Recep Tayyip Erdogan is seeking closer financial ties with Russia as he tries to stabilize the troubled economy ahead of next year’s elections, he reported.BloombergAccording to Turkish officials, Friday.
Turkish officials, speaking on condition of anonymity because sensitive information was discussed, said among Erdogan’s goals was to lower prices and pay in lira for energy imports. Turkey’s natural gas bill is set to exceed $50 billion this year and Russia is its largest supplier of energy.
Senior Turkish officials familiar with the matter noted that during a meeting with Russian President Vladimir Putin in Uzbekistan, on Friday, Erdogan sought a 25% discount on natural gas prices, and an agreement that Turkey could pay part of its bill in lira.
People familiar with Moscow’s position did not confirm the talk about cuts in gas prices for Turkey.
On Friday, Putin said that a previous agreement with Ankara to pay a quarter of its gas imports in rubles would come into force soon, and Putin did not mention receiving payments in lira or offering a discount.
Turkey is expected to run a deficit of $47 billion at the end of this year, the weak performance of the lira makes debt coverage more expensive, and rising global energy prices have added an additional burden, according to Bloomberg.
Any help to prop up the economy could provide a major boost to Erdogan, whose ratings in opinion polls are hovering at historic lows with inflation accelerating above 80% less than a year before elections scheduled for next June.
On the other hand, Turkish bank shares witnessed their biggest drop in three days ever, and the gains in recent months declined, according to the report. Bloomberg AgencyFriday.
The agency said that the Istanbul Stock Exchange index of banks, after rising 150% in about two months, has fallen by 24% since Monday’s close, resulting in a loss of 94 billion lira ($5.1 billion) in market value.
The agency indicated that the decline was due to US inflation data.
Turkish bank shares have been boosted this year, including by a strong profit outlook. Policymakers lowered interest rates, which led to gains in banks’ holdings of government bonds – despite inflation of 80%.