11/14/2008

Government to launch interest-free instruments to attract Gulf capital

Today’s Zaman - The Turkish government is set to take another step to stave off the adverse effects of the ongoing global financial crisis on the economy after having introduced incentives to encourage Turkish expats living abroad to bring their money into the country and households to contribute their personal savings to the economy. The projected plan aims to attract Gulf capital to Turkey by creating interest-free instruments such as rent certificates, real-estate partnership bonds and participation certificates. According to information provided by the sources, the Treasury will first issue YTL 1 billion in bonds. These Islamic bonds will also help money in the coffers of participation banks - Islamic financial institutions in Turkey that provide interest-free banking services - remain within the Turkish financial system. Speaking to Today's Zaman about the government's intentions to create interest-free financial tools, Bank Asya General Manager Unal Kabaca said this would do a great deal to open doors to the inflow of Gulf capital. Turkiye Finans General Manager Yunus Nacar was also jubilant upon hearing about the government's project. "Participation banks were not able to lend to the Treasury, but now it will be possible for them to invest their funds with more options," he said.
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