Business and Finance
Bloomberg reported that Turkey would be replacing a 0.1% tax on foreign exchange transactions in a move that would increase its revenue, but increasing concern that the government played an important role in managing the money market.
The tax, which remained at zero for more than a decade, will be imposed on foreign currency dealers and will not affect interbank transactions or credits, according to presidential decree issued Wednesday in the official gazette.
According to Erkin Essek, senior economist at QNB Finansbank in Istanbul, the tax could add about 200 million lira ($ 33 million) a month to the Turkish budget this year.
The Turkish government turned to various tactics to stabilize the national currency, especially before the local elections in March, where we lobbied local lenders for not providing the investors to foreign investors, t although officers repeatedly deny capital controls.
The new market analyst at Credit Agricole International, Guillaume Tricca, said Ankara, by reintroducing the tax, sent an incorrect signal to markets. "The risk is that this move will prevent more foreigners from investing in Turkey," he said.
In contrast, the agency "Anatolia" cites anonymous Treasury Treasury officials, that the purpose of the tax reform is to prevent speculation in foreign currency and support tax revenues.
The lira fell more than 12 per cent against the dollar this year, the worst performer in the market money developing after Argentina's peso.