Turkey banks may face borrowing problems on Halkbank – analyst

Turkey’s banks may face problems borrowing in international markets should the U.S. Treasury decide to fine state run Halkbank and one or two other lenders for breaking sanctions on Iran, news website T24 reported citing analyst Atilla Yesilada.

Turkey faces refinancing needs of about $16 billlion-$18 billion per month and may not be able to roll over all of the debt should the Treasury impose financial penalties, Yesilada said, according to T24.

That means that firms owing money will need to change lira into dollars to repay what they owe, leading to declines in the lira, he said.

Because a recent case in New York revealed the alleged role of top Turkish officials in the sanctions-busting scheme, the Treasury has the freedom to implicate the officials, Yesilada said.

Therefore, the Turkish government may be forced to negotiate with the U.S. government and comply with certain conditions, such as releasing officials of U.S. consular missions in Turkey from jail, compromising on its Syria policy and dropping plans to buy missiles from Russia, he said.

Yesilada said a decision by the Treasury probably won’t be made until after the chief suspect in the case, Mehmet Hakan Atilla, receives his sentencing on April 11.