Tükiye's removal from the global watchdog's "gray list" is considered another significant milestone following the adoption of more conventional economic policies and is anticipated to provide a boost to the inflow of foreign investments to the country, according to experts and analysts.
The international crime watchdog Financial Action Task Force (FATF) removed Türkiye from its "gray list" of countries that require special scrutiny on Friday.
Türkiye has made "significant progress" in improving its regime of anti-money laundering and combating the financing of terrorism, the Paris-based body said in a statement after its plenary meeting in Singapore.
Turkish officials welcomed the move, which is seen as improving its international standing and potentially drawing in fresh investment.
Similarly, shortly after the announcement of the decision, many representatives of the Turkish business world, from the banking sector, fintech and the leading economic organizations hailed the move, with many considering it would open doors to capital inflows.
The credit rating agency Moody's also saw the outcome in a positive light, saying it would contribute to Türkiye's international standing.
"This development is expected to boost Türkiye's reputation internationally, potentially boosting foreign investment and relationships with European and U.S. institutions," said Mohamed Daoud, industry practice lead at Moody’s.
Daoud emphasized that Türkiye's removal from the FATF "gray list" is an indication of the "significant progress" made by the government and various economic sectors in combating money laundering and financing terrorism.
Türkiye Payments and Electronic Money Institutions Association (TÖDEB) President Ufuk Bilgetekin also stated that the FATF's removal of Türkiye from the gray list would increase confidence in Türkiye and lead to a significant acceleration in capital flows.
"Our removal from the gray list will enhance foreign investors' confidence in Türkiye and accelerate capital flows," he noted.
"Due to legal regulations, many international investment funds were unable to invest in countries on the gray list," said Bilgetekin.
"This decision means that funds can now comfortably invest in Türkiye," he said, adding that In the coming period, they expect an increase in company mergers and acquisitions (M&As).
Several other experts and officials commented on the decision, emphasizing its potential positive impacts on foreign investor inflows and capital movements.
'Significant milestone'
Ahmet Uluhan, corporate relations director of NCM Securities Inc., in his assessment to Anadolu Agency (AA), highlighted that this removal marks a significant milestone for Türkiye.
Stating that the positive outcome of a process that has been the focus of the markets for a long time and where the exit is almost certain is very important for both the Turkish economy and its multifaceted effects for the future. Moreover, he noted that the efforts of the steps taken in economic policies and the results to be obtained would be seen more clearly from now on.
"We know that many international fund investments have interest and appetite for the Turkish economy. However, we also know that such funds do not invest in countries that are on the gray list due to their legal regulatory criteria," Uluhan explained.
"With this development, the interest of such large investment funds will increase further and it will be possible for them to invest in Türkiye," he said.
Professor Erhan Aslanoğlu, vice rector of Istanbul Topkapı University, also welcomed the decision, noting its alignment with expectations and its potential to alleviate bureaucratic obstacles related to trade and capital transfers, while also potentially contributing to attracting investment and economic trends due to a possible increase in credit rating.
"Our country's ability to borrow from international markets will increase slightly from now on. This development, which will contribute positively to foreign investors' view of Türkiye, will accelerate the flow of international capital to our country," said Seyit Ardıç, the president of the Ankara Chamber of Industry (ASO).
"Exiting from the gray list will contribute to alleviating additional burdens and inspections on businesses engaged in foreign trade and increasing exports. These developments will support the growth of the country's economy and contribute to financial stability," he noted.
"The decision is a confirmation that the country's economy is progressing on the right path. It will contribute to the formation of positive perceptions and opinions about our country, and will have a positive impact on the Turkish economy and our investment environment," said Rifat Hisarcıklıoğlu, chair of the Union of Chambers and Commodity Exchanges of Türkiye (TOBB).
"The good news around Türkiye, and the reforms from (Finance Minister Mehmet) Şimsek just keep on coming," said Tim Ash, a strategist at Bluebay Asset Management.
Türkiye was downgraded on the list late in 2021, but the FATF, set up by the G-7 to protect the global financial system, said in February that Türkiye "has substantially completed its action plan" and warranted an on-site assessment.
With the on-site assessment conducted last month and final approval for the removal from the list, Türkiye appears to be opening a new page that would add to policymakers' efforts to contain inflation and build up reserves, while also attracting more foreign capital.
Last year, foreign direct investment (FDI) inflows to Türkiye amounted to $10.6 billion, while this figure stood at $1.5 billion in the first quarter of this year, slightly below the overall quarterly average in the recent period.
Şimşek hailed the removal from the "gray list," with the post "We succeeded," on the social media platform X shortly before the official announcement on Friday.