Turkey’s new economic model, called the ‘Turkey Economy Model: New Steps and Inflation Measures,’ will be launched by the Treasury and Finance Minister Nureddin Nebati on February 12 at 2.00 PM. The economy manager plans to lay out support measures, mechanisms, and incentive packages that will prioritize production, exports, and the fight against price increases.
Treasury and Finance Minister Nureddin Nebati, who is preparing to announce a comprehensive road map against inflation, says he will explain many measures that will be taken, aimed at preventing the hike in consumer prices with the contribution and support of all stakeholders.
Apart from inflation measures, a selective financial support package will be launched to support enterprises and exporters through the Credit Guarantee Fund (KGF).
Within the frame of the country’s new economic model, the steps to be taken to transfer ‘under the mattress’ gold to the financial system will be shared with the public at the meeting. Nebati, who held meetings with investors and banks this week in London, said they will put the under the mattress gold, which is estimated at around 5,000 tons to the official system. “This is equivalent to USD 250-300bn. A certain amount of this gold will support the Central Bank and meet the foreign exchange (FX) need,” Nebati added at the meeting.
On the other hand, the Central Bank’s weekly money and banking statistics showed that companies have accelerated their conversion of FX deposit accounts into FX-protected TRY deposit accounts (KKM) after tax advantages were implemented. According to parity-adjusted data, residents’ FX deposit accounts dropped by USD 5.08bn in the week ending on February 4 compared to the previous week. Legal persons’ FX deposit accounts comprised USD 4.17bn of this while real persons’ FX deposit accounts comprised USD 911m.
The Central Bank has amended the usage conditions for rediscount credits for export and FX earning services. Companies that aren’t net exporters have are now obliged to convert from FX into the KKM when using rediscount credits.
In the meantime, the Banking Regulation and Supervision Agency (BDDK) will periodically release the data about the size of the FX-protected TRY deposit and participation accounts, according to a statement from the institution. The first data will be announced by February 14, 2022.
DAILY AGENDA
The current account balance posted a USD 3.84bn deficit in December 2021, according to the Central Bank. Thus, the current account balance ended 2021 with a USD 14.88bn deficit.
The Industrial Production Index increased by 14.4% in December 2021, compared to the same month of the previous year, according to the Turkish Statistical Institute (TurkStat). The index rose by 1.6% month-over-month.
Total turnover index surged by 82.4% in December 2021 as compared to December 2020, according to TurkStat. The index climbed by 12.8% on a monthly basis.
Retail sales volume rose by 15.5% in December 2021 compared to the same month of the previous year, according to TurkStat. Retail turnover increased by 64.7% in the same period.
Year-end Consumer Price Index (CPI) expectations jumped to 34.06% for 2022, according to the February results of the Central Bank’s Survey of Market Participants.
Energy and Natural Resources Minister Fatih Donmez will convene with the representatives of the electricity distribution sector (2.00 pm).
The international credit rating agency Fitch Ratings will announce Turkey’s outlook at midnight.
Meanwhile…
>> The Industrial Development Bank of Turkey (TSKB) signed a credit agreement worth USD 220m with the Japan Bank for International Cooperation (JBIC) with an aim to support renewable energy projects.
>> Vakifbank and Halkbank will raise their capital by TRY 13.4bn each, according to the statements from the banks made to the Public Disclosure Platform (KAP).
>> Foreign investors’ net equity outflows from Turkey totaled USD 81.9m, while their net government debt securities (GDS) acquisitions totaled USD 35.5m, in the week ending on February 4, according to the Central Bank. Foreigners have sold their equities for the last 11 weeks and they have acquired GDS for the last three weeks. Foreign investors’ net equity outflows totaled USD 1.68bn in the last 10 weeks, and their net GDS acquisitions amounted to USD 113.8m in the last three weeks.
>> The Central Bank’s international net reserves increased by nearly USD 5.8bn to USD 10.53bn in the week ending on February 4, compared to the previous week. The bank’s total reserves rose by USD 4.44bn from USD 110.2bn to USD 114.6bn in the same period.
>> Residents FX deposit accounts total USD 225.09bn as of February 4. Thus, the amount has reached its lowest level since April 16, 2021.
>> Some 98,602 new coronavirus cases and 264 deaths due to COVID-19 were reported in the last 24 hours by the Health Ministry.
