What matters on Tuesday, October 26

Turkey managed to avoid a diplomatic crisis with its Western allies last night. The 10 foreign embassies that called for the release of Osman Kavala last week stated that they would abide by Article 41 of the Vienna Convention on Diplomatic Relations, which calls on envoys not to interfere in the internal affairs of the states they serve in. “Our intention is never to cause a crisis, but to protect our country’s law, honor, interests, and rights of sovereignty,” said President Erdogan after the Cabinet meeting, in response to their statements.

The Biden administration wants to collaborate with Turkey on mutual priorities and the U.S. will continue to use diplomatic dialogue to resolve any disputes with its NATO ally, according to the U.S. State Department Spokesperson Ned Price. “We believe the best way forward is through cooperation on issues of mutual interest, and we know that we have many issues of mutual interest with Turkey,” Price said at the daily briefing.  “What we issued was a statement to underscore that the statement that we put out on October 18th was consistent with Article 41 of Vienna Convention. We are steadfast in our commitment to promoting the rule of law, to promoting respect for human rights globally. This commitment is unwavering, and we will continue to engage with Turkey as consistent with Article 41,” he added. 

The Turkish Lira, which hit several all-time lows following President Erdogan’s stating on Saturday that he would declare the ambassadors of 10 countries that called for the release of Osman Kavala ‘persona non grata’, combined with the effects of the Central Bank’s 200 basis point interest rate cut, strengthened with assurances that the ambassador row would not turn into a diplomatic crisis. The USD/TRY rate is hovering around 9.58-9.60 this morning, while EUR/TRY is trading at 11.13.

The economic growth target for Turkey has been set 9% for 2021 and 5% for 2022 based on the 2022 Presidential Annual Program. The plan also hopes to reduce inflation to 9.8% by the end of 2022 by with efficient monetary and fiscal policies as well as production and productivity increase.


Official reserve assets rose by 3% to USD 121.3bn in September, compared to the previous month, according to the Central Bank.

Vice President Fuat Okay will deliver a speech about the legislative proposals regarding the 2022 Central Government Budget.

The Parliament’s General Assembly will discuss Presidential resolutions regarding the extension of the period to send troops abroad, including to Iraq, Syria and Lebanon (3.00 pm).


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