Investors Cautious on Turkey Despite Encouraging Policy Shifts

Investors remain cautious about investing in Turkey despite meetings with the finance minister. Concerns include potential policy reversals and challenges facing the economy.

The confidential BofA document summarizes feedback from 23 investors who met with the finance minister in October.

Investors cited negative real interest rates, low reserves, and the need to sustain recent orthodox policies as issues. Local elections in March raise fears of populist measures.

The finance minister was praised for outreach, transparency and a shift toward orthodox policies like rate hikes. But investors want to see policies entrenched before investing.

Many investors have been previously burned in Turkey when brief turns toward orthodoxy were later reversed. They remain wary despite encouraging recent changes.