Turkey's finance minister held the worst IMF-World Bank meeting ever
Turkish Finance Minister Berat Albayrak held a closed-door meeting with hundreds of investors during the IMF-World Bank meetings in Washington last week, and some who attended called it the worst they've ever had with a high-ranking government official.
What they're saying: "It was an absolute shit show," one emerging market fund manager who attended the meeting but was not authorized to comment on it publicly told Axios.
"I've literally never seen someone from an administration that unprepared," another investor said.
The backdrop: Government officials typically gather with investors during the week to lay out their plans to boost economic growth and address any fears of a weakening economy or debt default. Investors say Albayrak did none of that.
Why it matters: The unimpressive performance could not have come at a worse time for Turkey. Investors are growing more anxious as the country heads toward recession and President Recep Tayyip Erdogan is seeing his popularity erode. (Albayrak is Erdogan's son-in-law and replaced 2 highly respected ministers, despite having limited qualifications.)
- Erdogan's party lost key elections in the country's 2 largest cities, and the president is challenging the results. His government also recently imposed de facto currency controls, reportedly telling local banks not to lend the country's currency to foreigners in order to keep it stable.
- Locals increasingly are shifting toward conducting business in hard currency — U.S. dollars and euros — and away from the Turkish lira, Michael Conelius, an EM portfolio manager at T. Rowe Price, tells Axios.
What's next: Conelius said his biggest takeaway from the week's events was that he became more pessimistic about chances for a turnaround in Turkey.
- "Not only are the fundamentals not improving, Erdogan is doing worse, investor sentiment is very, very bearish and they still have significant refinancing needs."
- "This could be a systemic issue for emerging markets."
Yes, but: None of the asset managers who spoke with Axios said they had immediate plans to sell Turkish assets.
- While the lira has weakened, it has not fallen back to levels seen last year when its value sank by as much as 40% to its weakest level against the dollar in history.
- The country's benchmark stock index also has been modestly positive this year, up more than 5%.
Go deeper: Keep an eye on Turkey