Turkish finance minister defends economic relations with Russia as legal

Turkey’s finance minister Nureddin Nebati said Ankara’s economic ties with Russia were “good neighborly relations” in an interview with British Financial Times newspaper that was published on Tuesday while conceding there had been a rush of cash into its financial system, as western governments increasingly raise concerns that the country is serving as a backdoor for Moscow to evade sanctions.

Nebati said “opposition elements” inside and outside Turkey were “deliberately raising question marks” about the country’s financial links with Russia.

Western countries claim that Turkey is relieving financial pressures on Moscow by not participating in sanctions on Russia but Nebati insisted the economic ties between the two countries were “legal”.

“Turkey is a country that acts very carefully within the international financial system. It’s not a country that behaves in ways that will cause breaches of the international financial system. We’re very clear on this,” Nebati said adding that “Everything is coming to us through legal routes.” 

Nebati also explained the source behind the mystery funds that have reached a record $28 billion in the first eight months of 2022, playing a key role in financing a large current account deficit.

Unaccounted-for tourism revenues were a key component, particularly from Russians, many of whom used cash because they were unable to use the financial system owing to western sanctions on Moscow, Nebati said. 

The finance minister also cited the fact that Turkey was “surrounded by war” in Russia, Ukraine, Syria and Iraq as another source of inflows. He added that Turkish companies and individuals had repatriated money that was kept offshore back to the country — a phenomenon he said was also sometimes cash-based.