22 July 2016•Update: 22 July 2016
By Murat Temizer
ANKARA
In the wake of the snap decision made by Standard & Poor's (S&P) in its rating downgrade on Turkey, the country's development potential should be considered, head of Natural Gas Distribution Companies Association (GAZBIR) said Thursday.
The international rating agency downgraded Turkey's credit rating from "BB+" to "BB" on Wednesday with a negative outlook amid a failed military coup last Friday.
Yasar Arslan told Anadolu Agency that Turkey is still not far away from its international goals and the country is still has a positive investment climate.
"On the contrary, [to S&P's downgrade] eliminating this terrorist threat is a sign which shows that Turkey is built on a solid basis," he said.
Arslan stressed that Turkey has promoted relations with many neighboring countries in the past months including Russia and Israel while the government has taken measures to develop new investment opportunities.
Turkey's Deputy Prime Minister Mehmet Simsek said on Thursday that Turkish capital controls “are out of the question."
A country can use capital controls to order its banks to impose strict limits on daily withdrawals and foreign country transfers of cash.
He added that Turkey’s banking sector is well capitalized and has strong asset quality.
Turkey’s Central Bank took action on July 17 by cutting commissions to zero on daily liquidity options for banks and providing unlimited liquidity to maintain financial markets following the coup bid.
It also said it would increase the daily foreign exchange auction limit from $50 million if necessary.
"Turkey has seen big structural changes in the last 15 years in which the banking sector became more secure. Turkey's energy market has also seen great development over the same period," Arslan said.
"The natural gas sector saw investments of more than $10 billion in this timeframe and we expect the same amount in the coming 10 years. If the exchange and interest rates remain at a critical level for growth, we can easily reach our goals," he added.
Turkey's annual growth was projected to be 3.4 percent in 2016, compared to the four percent seen in 2015, according to S&P, which affirmed Turkey's rating at "BB+" and revised up its outlook to stable from negative on May 6.
Back then, the rating agency had emphasized the upward revision with a statement that said: "The Turkish economy was resilient to the challenges posed by the busy electoral calendar in 2015, the end of the peace process with Kurdish militants, heightened regional instability and weak investor sentiment toward emerging markets.
- Coup attempt did not affect economic indicator
Arslan stressed that the Turkish Republic is a big G-20 country with substantial investors, economy and workforce.
"The malicious attack on July 15 didn't affect the economic indicators thanks to the Turkish government's quick measures and the citizens' common sense. Uncertainty will be surpassed with our unity and strength," he asserted.
Arslan declared that the exchange rate and oil price are the most significant indicators for the energy sector and urged that the exchange rate be kept under control.
"Crude oil prices continue at the same range at around $45 - $50. The important thing is to keep the floating exchange rate under control. Our economic administration took steps in banks against possible risks." he said.
A decisive stance in the coming days will help lower economic risks in the country, he said, adding that the concerns of the international rating agencies will be dissipated within the next few days.
