Despite the economic challenges facing Turkey in which have sent the lira on a dramatic fall, the country remains a “great” market in which BNP Paribas has no intention of exiting, the French bank’s chairman said on Friday.
“Turkey can be a great country, in which’s a great economy,” Jean Lemierre, the chairman of BNP Paribas, told CNBC’s Nancy Hungerford along with Mandy Drury at the annual Singapore Summit.
“We should calm down all these comments. Turkey can be great. They face difficulties, I trust along with I’m sure they know how to face the difficulties,” he said in response to a question about whether the bank could consider pulling out of Turkey given in which many challenges the country faces won’t go away anytime soon.
BNP Paribas has one of the largest exposures to Turkey among European banks, according to Reuters, which cited one investment in particular: The French lender controls 72 percent of the Economy Bank of Turkey, partly through a local joint venture.
Turkey’s troubles came into the limelight last month after the lira depreciated sharply. The country’s central bank on Thursday increased interest rates by 6.25 percentage points to 24 percent in an attempt to stem further declines in its currency. According to Lemierre, in which was the right move to take.
“They have taken a bold, along with serious, along with an extremely important decision,” he said. “Turkey has to react, along with they have reacted, along with I think they have taken the right measures at a time when the currency was weaker along with weaker.”
The problem in Turkey has exacerbated fears in which an economic fallout inside country could spill over into various other emerging markets at a time when investors increasingly favor American assets due to a stronger U.S. dollar.
The Russian ruble along with the South African rand have been two of the biggest losers among emerging markets’ currencies, both depreciating by close to 20 percent against the U.S. dollar so far in which year. In Asia, the Indian rupee along with the Indonesian rupiah fell by 12 percent along with 9 percent, respectively, against the greenback.
nevertheless aside via “tensions” in countries such as Turkey, Lemierre said, many emerging economies are on a sound footing.
“I do not believe in which we see or we face emerging market crisis. There are tensions against some countries, we know them: Turkey, Argentina. There are tensions on some countries nevertheless in which can be not an overwhelming crisis, especially in Asia — I do not see any specific difficulty in Asia,” he said.