According to Bloomberg, Erdogan’s four-hour meeting with Putin last week in Sochi led to an understanding that allowed Turkey to waive dollar payments for some of its imports, particularly energy imports.
With less than a year to go before a general election and Erdogan’s approval ratings near record lows, Erdogan needs to stabilize Turkey’s economy after abandoning his ultra-recession-free monetary policy, the agency said. This agreement is a “blessing”. For the president of Turkey.
Analysts warn that the currency could face more headwinds by the end of this year as the Turkish treasury and companies must carry their dollar-denominated debt while seasonal tourism revenue declines.
With oil at current prices, Turkey’s energy import costs could reach $70 billion, or nearly three times what the country spent on oil and gas last year.
Russian payments in rubles for some imported gas would help Turkish policymakers stabilize the lira and prevent another wave of price increases ahead of next year’s elections, the agency said.
It comes shortly after Turkey’s foreign reserves have been boosted by the transfer of funds by Russia’s state-owned nuclear company RosAtom to its subsidiary in Turkey to build a plant on the Mediterranean coast.
Turkey, like other NATO members, opposes Russia’s invasion of Ukraine and has sent weapons, including highly effective drones, to the Kyiv government to help counter Putin’s army.
But at the same time, Turkey refused to join the US and European sanctions against Russia that were imposed due to the war.
Turkey’s president wants to deepen economic ties with Russia at a time when Western companies are forced to leave, but without provoking a complete break with traditional NATO allies.
Source: Lebanon Debate
