Turkey stood by Doha when Saudi Arabia, the United Arab Emirates (UAE), and two other Arab nations imposed an embargo on Qatar in 2017.

Negotiations that could see Qatar provide up to $10 billion in funding to Turkiye – including up to $3 billion by the end of this year – are nearing their conclusion, two senior Turkish officials and another source told Reuters.

One of the officials said that the Turkish and Qatari leaders had discussed the matter and that the total funding could take the form of a swap, eurobond, or other mechanisms. 

The Turkish Treasury did not immediately respond to requests for comment, nor did Qatari officials.

‘Final stage’

By balancing the supply and demand for foreign currency in the economy, Ankara has been expanding its options for foreign resources to support its strategy of bolstering the lira.

A swap agreement between the central banks of the two countries was already in place; it was initially worth $5 billion but was tripled to $15 billion in 2020.

“Talks for Qatar to provide new resources to Turkey have reached the final stage. A minimum amount of $8 billion is foreseen” but it could total as much as $10 billion, the first official told Reuters.

“Resources will be obtained, with $2-$3 billion by the end of this year (and) the rest to come next year. This could be a swap or eurobond but they are discussing several methods. There is a mutual agreement,” the source added.

The second Turkish official claimed that the eurobond was at the centre of discussions for this year’s funding of $2–3 billion.

Due to their lack of permission to discuss the funding, the sources spoke on condition of anonymity.

Close ties

Turkey, with which Qatar has close ties, stood by Doha when Saudi Arabia, the United Arab Emirates (UAE), and two other Arab nations imposed an embargo on Qatar in 2017 following a dispute that was settled in 2021.

While Treasury and Finance Minister Nureddin Nebati met with his Qatari counterpart Ali bin Ahmed al-Kuwari last month, President Recep Tayyip Erdoan was in Qatar on Sunday for the World Cup soccer opening match.

Of the $11 billion in foreign borrowing anticipated for 2022, $9 billion has already been borrowed by Turkey’s Treasury and Finance Ministry.

The ministry estimates $10 billion in foreign borrowing for 2023, but it has the option to issue debt earlier if funding is required sooner.