According to the Ministry of Finance and Treasury, bonds worth $2 billion with 7,5% annual yield and 5-year payback have been emitted last week. Regardless of whether it is regulated by fully the state or capitalist system, any treasury is entitled to put up bonds to the market. Under current circumstance where no purely etatist economic systems have survived worldwide with yield of bonds placed by the developed capitalist systems (for example, Germany and Japan) varying between 0,01% and 00,14% per annum, it was rather easy to find clients for 7,5% per annum securities issued by the Ministry of Finance and Treasury of Turkey. Also, the Ministry announced that "demand for bonds exceeded 3 times supply" (this reminds of Rovnaq Abdullayev"s words about large-scale SOCAR projects: "offerings worth Euro 500 million have come for bonds at the market worth Euro 500 million").
Beyond any doubt, take of loans under any interest or emit bonds is a prerogative of the government of a country, that"s why we are not going to discuss the Turkey"s securities. We are interested in the following: can $ 2 billion worth bonds with 7,5% yield become a panacea for all $80 billion worth external debts to be paid off by the end of the year? Where can $2 billion from realized bonds be expended: either to currency reserves of the Central Bank, into investments, assets of the Stock of Wealth? The current situation in the country is that the said $2 billion may help minor and medium entrepreneurs with slightly "straightening their backs". In the meantime, the latest drop in the currency rates yas nothing to do with $2 billion worth bonds.
It would be understood that the drop in the rate is primarily connected with the fact that the government has or is still going to perform any task but if failed, debts remain unpaid to thus threaten the business world. In other words, apprehensive of governmental measures, the business world is afraid "to carry the can" due to the rise in the rate and unwilling to deal with the currency. In other words, burdened with administrative means the medium and large investors are doing their utmost to make their debts "go round in circles".
Note that large companies, for show though, are supportive of a campaign within the framework of the program of the Ministry of Finance and Treasury Berat Albayrak titled "Struggle against inflation along the entire front" (the nearest future will show how far are these measures - reminiscent of Soviet "plan implementation" - effective). As a matter of fact, the business world is forced to announce about full backing to the program within the framework of present propaganda mechanism.
Most probably, the current situation is as follows: "The market is waiting what heads will say while heads are watching the market closely".
Irrespective of potential opportuinities, including underground and aboveground resources, it"d be inexpedient to make the economic system dependenyt upon bonds. It cannot hurt to remind that a cautionary tale of high-percentage bonds put up for sale by Michael Gorbachev has not yet been forgotten.
Great East
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