Geert Bekaert and Campbell R. Harvey's
Chronology of Economic, Political and Financial Events in Emerging Markets
Turkey
Major Political and Economic Events
Date
8000
Interest rate ceilings on loans and deposits were eliminated. Mehrez and Kaufmann Liberalization date. a1
8100
Quotas for imports abolished, and advance deposits reduced. New variety of Turkish Lira introduced, NGTA, that allowed nonresidents to buy into Turkish enterprises and nonresidents to set up companies outside Turkey.a
8100
The introduction of the Insider Trading Laws.a4(some disagreement, see April 1992)
8211
Elections bring end of military rule. Foreign exchange controls were sharply eased.a
8200
Banking crises (1982-1985): 5 banks were rescued, and 2 large banks were restructured. Causes: (1) 79/80 recession brought on by tight monetary policy; (2) liberalization of banking system without adequate strengthening of regulatory and accounting framework and baking supervision; (3) lending to related parties. Overall change in macro policy: (1) government regulated interest rates; (2) macro policies resulted in poor macro-setting: high public sector deficits; large foreign debt service payments, high inflation and high real interest rates.a2
8400
Exchange rate controls removed in early 1984. Effective Rate for the Lira was set daily by the Central Bank and periodically adjusted.a
840414
A Foreign Exchange Risk Insurance Scheme was established, designed to provide domestic borrowers with an exchange rate guarantee for approved foreign borrowing.a3(first entry)
8601
Re-opening of Istanbul Stock Exchange.a10
861101
Limitations were placed on the net foreign asset positions of commercial banks. The banks are also required to extend foreign exchange credits to residents in an amount equal to at least one half of their foreign exchange deposits.a3
8704
Turkey's application to EU.a10
8800
Article 15 of Decree 32 paves way for foreigners to invest directly in Turkey.e No longer are foreigners required to seek preapproval to purchase or sell securities listed on the Istanbul exchange. 
8800
Direct credit was phased out.a1
880209
The 15% transfer requirement on foreign exchange holdings of commercial banks was increased in stages to 25% by May 1, 1988.a3
880702
Foreign investors and investment funds were admitted to the Turkish Capital Market, and were allowed to buy and sell securities and become partners in Turkish companies. All investments are to take place through banks and intermediary companies.a3
881021
The reserve requirement ratio was set at 25% for foreign exchange sight deposits and at 20% for foreign exchange time deposits.a3
8900
Since 1989, foreign investors have been permitted to trade in listed securities with no restrictions at all and pay no withholding or capital gains tax provided they are registered with the Capital Markets Board and the Treasury.q
890619
Foreign investment funds approved by the Treasury were allowed to set up securities portfolios, the income from which would be tax free.a3
8907
Communiqué passed allowing foreign mutual funds to have access to equities market. Subsequently, a resolution passed in Official Gazette, declared the securities market in Turkey fully open to foreign institutional and individual investors.q
890811
Applications by residents of Turkey to make direct investments overseas of up to U$25 million or its equivalent were subject to approval by the Undersecretariat of Treasury and Foreign Trade. The export of capital exceeding this amount was subject to approval by the Council of Ministers.a3
890811
Foreign residents were allowed to purchase or sell any type of Turkish securities registered on the stock exchange through intermediary institutions operating on the market and to transfer the income or proceeds from sales of these securities abroad through banks and authorized financial institutions, provided that such proceeds would not be transferred abroad. If the securities had not been purchased with funds transferred from abroad, the proceeds from the sales of securities would not be allowed to be utilized freely in Turkey.
8908
IFC liberalization date. 
8908
Bekaert/Harvey Official Liberalization date. [Final and NBER version].
8908
Kim and Singal Liberalization date.
890913
The foreign exchange risk ratios that determine the maximum and minimum ratios of foreign currency-denominated assets and liabilities commercial banks may hold were widened to 85-115% from 90-110%.a3
8912
Turkish Investment Fund, Inc launched on the NYSE. Net asset value as of December 1991 was $52.7 million.aa
8912
Buckberg liberalization date.d
900225
Residents were allowed to invest abroad up to US$5 million through banks and special finance institutions domiciled in Turkey; investments above US$5 million would be subject to authorization. Nonresidents were allowed to purchase securities through intermediary institutions operating in Turkey. Residents were allowed to secure foreign credits provided that they use banks or special financial institutions as intermediaries.a3
900303
The minimum utilization ratio requirement, under which banks were required to extend 50% of foreign exchange deposits as foreign credit, was abolished.a3
900817
Turkish officials and private businessmen working abroad temporarily and workers living abroad temporarily would no longer be permitted to open new deposit accounts.a3
900820
ADR effective date. (Company=NET HOLDING INC., Exchange=OTC)a11
9007
First ADR announced.aa
901020
With approval, domestic banks and branches of foreign banks would be allowed to operate in free trade zones to conduct offshore banking activities.a3
9000
Capital flows were liberalized. Mehrez and Kaufmann's second Liberalization date. a1
9100
Banking crisis. y
910620
Residents in Turkey were permitted to sell freely abroad securities issued by companies in Turkey, and issue sureties and guarantees in foreign currency; banks were allowed to extend foreign exchange credits to other banks without maturity restriction; the minimum capital requirement for companies authorized to conduct foreign exchange transactions was raised to LT 2 billion; and banks and foreign exchange dealers were required to notify the authorities within 30 days of any transfers in excess of $50,000 or its equivalent that are unrelated to foreign trade or invisible transactions.
9110
The final outcome of the general elections removed prevailing political uncertainty. The True Path Party emerged from the elections as the biggest party, but was unable to gain an overall majority.
9111
On November 20, a coalition government was formed between the DYP and the Social Democrat Populist Party and the coalition later received Parliament's vote of confidence.
920401
The liquidity ratio of foreign currency-denominated assets to the foreign currency liabilities applied to banks was lowered to 16% from 20%.a3
9204
The introduction of the Insider Trading Laws.a10
9204
EIS becomes the first Turkish corporation to place equity directly with foreign investors through GDR offerings that raised $34 million.i First time rating assigned by Standard and Poor's of BBB to sovereign debt. Moody's assigned first time rating of Baa3.i
921120
The liquidity ratio for financial institutions with respect to foreign exchange liabilities was reduced from 20% to 10%. The ratios of (exchange rate risk) ratios of foreign currency-denominated assets to foreign currency liabilities that are applied to banks were reduced by 5% in respect of each category of liabilities.a3
9212
A tax decree introducing preferential tax rates on investments in mutual funds and investment trusts having a 25% equity content helped produce a 4% gain in the IFC Global Total Return Index.
930301
Authorization of the ministry to which the Undersecretariat of Treasury and Foreign Trade is attached was required for outward capital transfers exceeding $5 million.a3
9304
Death of President Ozal led to the Turkish Parliament approving Prime Minister Suleyman Demirel as the new Turkish President.
9312
On the last day of 1993, government officials announced significant changes to import tariffs for many products, but primarily autos and cigarettes due to new trade relationships with the EU.
9403
Central Bank abandoned its interventionist policy and begins to gradually devalue the lira.
9403
First exchange-traded overseas listing.a9
940301
A communique regarding the standard ratio of foreign exchange net general position to the capital base was put into effect, requiring the authorized banks to apply a max ratio of 50% of their net general position to their capital base.a3
940311
The definition of foreign currency holdings, claims, and debts that are to be taken into account in calculating the foreign currency liquidity ratio, and foreign exchange position ratio was modified by a calculation of the liquidity ratio, and the foreign exchange ratio will also include gold holdings and liabilities relating to gold transactions.a3
9404
Government announced a three-month economic austerity program on April 15, to lower inflation and reduce the budget deficit. 
9406
IMF increased Turkey's credit line to $713 million from $400 million following the adoption of the austerity program.
9409
Privatization program was approved by the Constitutional Court on September 8.
9412
Turkish and EU officials agree to postpone their customs union until March 1995.
950102
The restriction on the maturity period with respect to government papers denominated in foreign exchange or indexed to foreign exchange that are used to meet the liquidity requirement was abolished.a3
950115
A new export credit program was introduced by the Turkish Eximbank. The credits extended under this program would mature to ten years. The importing countries are classified in three groups, and OECD CIRR, government bond yields, and SDR basket rates would be applied to these loans. Premiums would be paid from the Support and Price Stabilization Fund for selected export products.a3
9503
A Customs Union with the EU and lower T-bill interest rate more than offset negative factors, including the Turkish army's invasion of Iraq to destroy the bases of the separatist Kurdistand Workers Party.
9503
Signing "Customs Union aggrement with EU".a10
9504
Relations between Turkey and the EU were strained during the first week of April. Government proposed that 15% of the shares of Turkish Telekom be transferred to current and former employees and another 10% to the postal service general directorate. The government will retain 51% of the shares.
9509
Central bank eased credit conditions. Later news of rising consumer prices prompted the central bank to reverse its monetary easing.
9512
The Refah party, espousing Islamic law, was the nominal election winner.
960102
The maturity restriction for keeping government securities issued in or indexed to foreign currencies was lifted for the liquidity requirement.a3
9603
A new coalition government was successfully formed between the True Path Party and the Motherland Party, causing an upsurge in stock prices.
9606
Collapse of new coalition government, power to Muslim Welfare Party.
960722
A 4% tax, earmarked for the RUSF, was levied on credits obtained by banks from abroad.a3
960722
The reserve requirement ratios were set at 8% for domestic currency and at 11% for foreign currency deposits. Deposits and other liabilities in domestic currency were subject to 6% liquidity ratio, while those in foreign currency were subject to a 3% liquidity ratio.a3
9606
Collapse of new coalition government, power to Muslim Welfare Party.
960802
Securities denominated in or indexed to foreign currencies that have been issued directly by or under the guarantee of the undersecretariat of the Treasury or by the Privatization Administration in the domestic markets were subject to the liquidity  and foreign exchange position ratios applied to the banks and special finance institutions.a3
960807
The share of foreign exchange indexed asset liabilities regarding the securities defined in the preceding paragraph in total foreign exchange asset/liabilities was increased from 50% to 100%.a3
9608
The stocks of state-owned petroleum distributor Petrol Ofisi and petrochemicals giant Petkin were propped up by a statement made by Deputy PM that the two companies were next on the list for a full sell-off after completing the first phase of privatizing the state telecom company, Turkish Telekom.
9609
Government aimed to reduce Turkey's large public deficits by generating $10 billion mainly through the sale of state property, the introduction of a new withholding tax on Treasury paper, and the securitization of major state infrastructure projects. The Turkish Capital Board will require that all foreign investors at the Istanbul exchange supply proper identification information from October prior to engaging in any transaction. Turkey has so far raised only $300 million from privatizations, far below the $2 billion target for 1996. More than 130 companies are slated for divestiture, including Turkish Telekom, Eregli (iron and steel) and several banking and industrial companies.
9611
Finance Ministry says that only interest income and not capital gains would be subject to withholding tax.
9612
Standard and Poor's downgrade of Turkey's long-term foreign currency debt from B+ to B sent stock prices tumbling and sparked fear of a financial crisis.
9600
The first prosecution under the Insider Trading Laws.a4
9701
Constitutional court rejected a request by opposition parliamentarians to block the sell-off of Turkish Telekom. The partial privatization of Turkish Telekom is expected to generate $3.5 billion for the government in 1997.
9703
The government has targeted $5 billion in privatization revenues in order to balance the budget. Moody's downgrades Turkey's foreign sovereign debt to B1 from Ba3, but many investors had expected it.
970311
(Controls on credit operations) The RUSF fee was amended. A rate of 4% was set for loans obtained by banks and financial institutions from abroad, and a 6% fee was set for loans obtained by other residents from abroad.a3
9704
The court began debating a request for the annulment of two articles in the privatization law, one concerning the evaluation of state firms slated for divestiture, and the other relating to the sell-off process.
9707
State-controlled iron and steel company Erdemir reached record highs on expectations that it is at the top of the government's privatization list.
9708
The overnight repo rate jumped to 79.84%, causing a severe cash shortage in the money market.
9711
Tensions in the gulf began to be felt around the region. The governments planned to implement a "shock program" in 1998 to rein in inflation.
9712
The government announced it would freeze the price of public sector goods through June 1998.
9801
The Constitutional Court ruled that the Welfare Party violated portions of the country's secularist constitution.
9802
Turkish petroleum prices were allowed to fluctuate with world prices. An agreement between the UN and Iraq on weapons inspection.
9804
Prime Minister Yilmaz had agreed to early elections for next March.
            9809 The government eased tax legislation by proposing a set of measures, which included lowering the stock holding period from one year to three months to be exempt from capital gain taxes, exemption of foreign investors’ fund portfolios, and release of insurance  companies from reserve requirements if they invest their funds in the Turkish stock market.
         981127 (Controls on credit operations) Requests for extending credits exceeding two years for the export of nondurable goods and five years for the export of other goods are approved by the Undersecretariat of Foreign Trade. (Provisions specific to commercial banks and other credit institutions) Special finances houses are obliged to hold 11% reserves for their domestic currency and 8% reserves for their foreign currency funds collected in current and participation accounts.a3
            9812 President Suleyman Demirel appointed the leader of the Democratic Left Party, Bulent Ecevit, to form an interim coalition government until general elections are held in April 1999.
         981217 (Provisions specific to commercial banks and other credit institutions) The rate of RUSF tax was reduced to 3%.a3
          990101 (Provisions specific to commercial banks and other credit institutions) The ratio of total net foreign exchange position to capital base was reduced from 50% to 30%, and all foreign exchange-indexed assets and liabilities were included in the calculation. For domestic deposits and other domestic liabilities, up to 2% and for foreign exchange deposits and other foreign liabilities, up to 1% of cash accounts of banks is taken into account in the calculation of liquidity requirements. The rate of tax on credits obtained by banks from abroad was reduced from 4% to 0%. a3
             9901 Inflation rates significantly declined from 92.5% at the beginning of the year to 54.3% by the end, the lowest inflation in seven years. 
             9902 Abdullah Ocalan, leader of the Kurdish opposition, was arrested, which raised hopes of an end to the fifteen-year-long conflict, which would reduce government expenses.
             9904 In the April 18 elections, Prime Minister Bulent Ecevit’s center-left Democratic Left Party (DSP) won the largest number of seats in parliament. The ultra-right Nationalist Action Party (MHP) came in second with just a few seats less than the DSP.
 
9905
A three-party coalition appointed a three-party government.
9906
The parliament passed a long-awaited banking law, but the IMF requested more strategic changes before the negotiations could be concluded and loans distributed.
990623
(Provisions specific to commercial banks and other credit institutions) The BRSA was established, and the acquisition of shares allowed by one person was increased from 5% to 10%. a3
9907
The government forwarded to parliament a number of new laws, including pension reform, and international arbitration law.
9908
The parliament passed the bills from the government. A devastating earthquake hit the country on Aug. 17, with the epicenter in industrial region Izmit. Nearly 17,000 were killed.
990831
(Provisions specific to commercial banks and other credit institutions) The ratio of total net foreign exchange position to capital base was reduced from 30% to 25%.. a3
990930
(Provisions specific to commercial banks and other credit institutions) The ratio of total net foreign exchange position to capital base was reduced from 25% to 30%.. a3
9910
International aid from the IMF in the form of US$510 million emergency fund, and help from the World Bank, European Union, Middle East, and Japan improved chances of fast recovery. The three-party made progress in negotiations over the 2000 budget, designed to comply with IMF recommendations.
9911
A second earthquake occurred.
9912
Government measures to control inflation, capital markets and banking legislation won the support of the IMF with a $4 billion two-year standby loan for fighting inflation and a $3 billion, three-year loan from the World Bank for structural and financial reforms. EU invited Turkey to become an EU member candidate on Dec. 10.
991210
(Provisions specific to commercial banks and other credit institutions) Reserve requirements on domestic currency deposits were reduced from 8% to 6%. A 2% liquidity reserve must be kept in deposits at the CBT.a3
200001
GDP increase 5.6% year-to-year. Turkey expected to raise US$7.6 billion from privatization of state assets. A new law allowing international arbitration between the government and foreign investors was passed. New measures to prevent insider trading was implemented. But Turkey ran into dispute with Greece over offshore mineral rights and territorial waters.
200003
Efforts to extend President Suleyman Demirel's term were rejected by the Parliament.
200004
Turkey's long-term foreign currency rating was upgraded to 'B+' as the stabilization program advanced.
200005
Ahmet Necdet Sezer was elected Turkey's President.
20000630
(Provisions specific to commercial banks and other credit institutions) Banks were required to calculate foreign exchange exposure limits on a consolidated basis.a3
200007
The National Action Party caused delays in privatization, and the IMF pressured for the delayed sale of Turk Telecom. Turkey failed to agree with the EU and the U.S. on the Armenian Genocide Bill. Turkey also signed a US$20 billion, 25-year agreement with Iran to import natural gas, despite strong U.S. opposition. Turkcell shares started trading in July, but the company was later charged with securities fraud over the handling of its IPO.
200010
The lira depreciated to its lowest level.
200011
A banking crisis was triggered by anxiety over bank liquidity problems and rumors of takeovers. The daily average overnight rate of interest was pushed to more than 1,000%.
200012
Several banks were seized. S&P revised Turkey's foreign currency debt rating. The crisis was contained with an IMF package of US$10 billion. Turkey agreed to strengthen its banking system and accelerate privatization. New capital markets and banking laws were initiated, including the creation of a central registry of capital market instruments, and an accounting standards body. IMF approved Turkey's macroeconomic reforms.
200102
Introduction of free float regime.a10
200105
Banking law was approved by the Grand National Assembly.a10
200101
The seized banks were sold and the electricity market was opened. To fight the countrywide banking crisis, the central bank boosted liquidity through the sale of US$3.5 billion in foreign currency. The lira was floated. Turkey's central bank governor and treasury undersecretary resigned.
200102
Share prices plunged, led by the banking sector. The Economic Minister closed weak banks.
200104
Interest rates were cut and the banking sector recovered.
200105
IMF approved an additional US$8 billion loan package.
200109
The Central Bank warned about the liquidity needs after the September terrorist attacks in the U.S. and lowered rates to 59%. Turkey swapped US$60 billion of bonds held by domestic banks and funds for new securities at lower value. S&P lowered Turkey's debt rating to 'B-'.
200100
Turkey agreed to strengthen its banking system, accelerate privatization, and open its airspace to U.S. antiterrorism forces. The merger of Garanti and Osmanli led to the largest private bank. The Savings Deposit Insurance fund (SDIF) took over Toprakbank and held a second wave of auctions.
200111 British construction firm Balfour Beatty and Impregilo of Italy pull out of the controversial Ilisu dam project. Swiss bank UBS follows suit in February 2002.
200201 Turkish men are no longer regarded in law as head of the family. The move gives women full legal equality with men, 66 years after women's rights were put on the statute books.
200203 Turkish and Greek governments sign an agreement to build a gas pipeline along which Turkey will supply Greece with gas
200207 Pressure for early elections as eight ministers including Foreign Minister Cem resign over ailing PM Ecevit's refusal to step down amid growing economic, political turmoil. Cem launches new party committed to social democracy, EU membership
200208 Parliament approves reforms aimed at securing EU membership. Death sentence to be abolished except in times of war and bans on Kurdish education, broadcasting to be lifted.
200211 Islamist-based Justice and Development Party (AK) wins landslide election victory. Party promises to stick to secular principles of constitution. Deputy leader Abdullah Gul appointed premier
200212 Constitutional changes allow head of ruling AK, Recep Tayyip Erdogan, to run for parliament, and so to become prime minister. He had been barred from public office because of previous criminal conviction.
200303 AK leader Recep Tayyip Erdogan wins seat in parliament. Within days Abdullah Gul resigns as prime minister and Erdogan takes over.

Parliament decides not to allow deployment of US forces ahead of war in Iraq but allows US use of Turkish air space. It authorises dispatch of Turkish forces into Kurdish areas of northern Iraq.

200306 Eyeing future EU membership, parliament passes further laws easing restrictions on freedom of speech, Kurdish language rights, and on reducing political role of military.
200311 25 people are killed and more than 200 injured when two car bombs explode near Istanbul's main synagogue. Days later two co-ordinated suicide bombings at the British consulate and a British bank in the city kill 28 people.
200406 Four Kurdish activists, including former MP Leyla Zana, freed from jail pending appeal after a state prosecutor says their 1994 sentences should be quashed.

NATO heads of state gather for summit in Istanbul

 
Year
Regulations on Foreign Investors
1995

Restrictions: no restrictions on investment or the inflow and repatriation of funds.

Taxation: Non-resident investment trusts and mutual trusts with a permanent representative in Turkey enjoy zero tax. Other investors will be taxed at 44% on capital gains.a5(first entry)

2001

No change through 2001.a5

last updated 7/10/04 by Jerome Mo, Duke Univ.

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Year
Regulations on Foreign Investors
1995

Restrictions: no restrictions on investment or the inflow and repatriation of funds.

Taxation: Non-resident investment trusts and mutual trusts with a permanent representative in Turkey enjoy zero tax. Other investors will be taxed at 44% on capital gains.a5(first entry)

2001

No change through 2001.a5

last updated 7/10/04 by Jerome Mo, Duke Univ.