Turkey's external financing need estimated at $100 bln in 2009

The FT report said estimates by Deutsche Bank suggest emerging market companies face a testing few months rolling over loans and bonds as banks continue to restrict credit and investors buy only the best quality debt and emerging economies need to refinance $1,440 billion of debt in 2009.

 

"We are witnessing a severe contraction in the extension of credit to emerging markets," Dalinc Ariburnu, global head of emerging markets at Deutsche Bank, was quoted as saying by the Financial Times.

 

"We are in the midst of a significant stress test for the emerging market institutions. Those that survive the next 12 months, as I believe most will, will be in a much stronger position going forward," Ariburnu added, according to the FT.

 

Turkey's public and private institutions need to fund $100 billion this year with reserves of only $70 billion, the report said.

 

Analysts say Russian companies are some of the most exposed, with its public and private institutions needing to refinance $117.1 billion in bank loans and bonds this year, Deutsche says.

 

Although the country and some of its state-supported institutions can fall back on the government's foreign currency reserves, which stand at $388.6 billion, these have been depleted since summer as the price of oil has fallen and its currency has come under pressure, FT added.

 

Central and Eastern Europe also remain heavily exposed. The foreign exchange reserves of countries in these areas are smaller and provide less of a cushion than Russia's, the report said.

 

Ukraine's public and private institutions need to roll over $40 billion in bank loans and bonds this year against foreign currency reserves of $28.8 billion. Hungary has about $35 billion to repay this year with foreign currency reserves of $31 billion, says Deutsche.

 

Asia has the highest external debt to roll over ($775bn) among EM regions, but its economies have stronger balance sheets, the report added.