Türkiye expects the United Arab Emirates (UAE) and Saudi Arabia to invest in its energy and defense sectors after negotiations in Abu Dhabi led by its top economy officials, two sources with knowledge of the talks said Thursday.
Vice President Cevdet Yılmaz and Treasury and Finance Minister Mehmet Şimşek traveled to the UAE on Wednesday ahead of a possible visit by President Recep Tayyip Erdoğan.
After his reelection last month, Erdoğan named the pair to his cabinet in a signal Türkiye would revamp policies centered around monetary stimulus and opt for interest rate hikes to combat stubborn inflation, stabilize the volatility in the Turkish lira and rebuild foreign exchange reserves.
In the first monetary policy committee meeting under new governor Hafize Gaye Erkan, Türkiye’s central bank hiked its benchmark policy rate by 650 basis points to 15% on Thursday and said it would go further in the coming period.
Since 2021, when Ankara launched a diplomatic effort to repair ties with Saudi Arabia and the UAE, investments and funding from the Gulf helped boost Türkiye’s foreign reserves and stabilize the lira.
With elections over, Gulf officials are discussing direct investments in the energy and defense sectors, the sources told Reuters. The status, size and timeframe of any deals were uncertain.
"Money inflow is expected in the coming period, especially from the Gulf region. They've made some high-level contacts in Türkiye. There will be some direct investments from Saudi Arabia and the UAE," one of the officials said.
Ankara had said that Yılmaz and Şimşek would discuss with UAE counterparts "economic cooperation opportunities." The duo held a meeting with UAE President Sheikh Mohamed bin Zayed Al Nahyan (MBZ).
Türkiye’s government hopes that new policy steps and regulations will attract investment and fund flows.
The central bank's net foreign exchange reserves fell to a record low of negative $5.7 billion last month before rebounding this month.
Ankara has secured some $28 billion in foreign currency swap deals in recent years, including from the UAE. Last year, Abu Dhabi's International Holding Co acquired via a subsidiary a 50% stake in Türkiye’s Kalyon Enerji for $490 million.
