Sunday, May 3, 2009

EconNews Roundup

Turkey tapped international markets for a 10-year USD 1.5bn eurobond issue. According to market economists, this means something for the IMF deal, but what, they are not sure: While some claimed that this meant that the Treasury was taking precautions for a delayed IMF deal, others said the Treasury was just strengthening its hand with the Fund. While you could easily make a pro or anti IMF deal argument, there is one more thing the issue tells us: Markets may be going down from here, as the Treasury is famous for issuing its eurobonds at the very top of the market. So, the Treasury is implicitly supporting the "sell in May and go away" scenario as well.

It turns out that rumors were only partly true: In an extensive cabinet reshuffle, Mehmet Simsek did indeed leave his position as EconMin, only to take the helm at the Ministry of Finance. Unsurprisingly, FinMin Kemal Unakitan got sacked and according to him, it is not because of his deteriorating health. Surprisingly, Vice PM in charge of economic coordination Nazim Ekren got the sack. Minister of Foreign Affairs (and ex EconMin) Ali Babacan took over Ekren's responsibilities as well as the Econ Ministry, making him in effect solely in charge of economic affairs. Interestingly, it was being said that the Fund was waiting for the cabinet changes (see how everything is tied to the Fund in Turkey), so we'll see if there is any progress on that front in the next couple of weeks.

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