Greenfield foreign direct investment can ease Turkey's current account deficit
Turkey needs to attract greater greenfield foreign direct investment to safeguard its economic growth, a new report has suggested.
A report from independent investment research company Standard & Poor's has suggested that more long-term foreign direct investment will help ease the country's current account deficit.
According to Standard & Poor's, portfolio inflows have been an attractive investment in the country due to high real interest rates offering good carry trade opportunities. But the short-term swings that this type of investment is prone to leave Turkey vulnerable in foreign exchange markets.
This could lead to exchange rate depreciation and threaten economic growth, Dunya Online reports. More foreign direct investments can counterbalance this threat, Standard & Poor's asserts.
Turkey's deputy prime minister Abdullatif Sener recently told Referans that there will be direct capital flow upwards of $10 billion (~£5 billion) this year and that funds flowing into the country's new mortgage system will help ease the current account deficit.
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