The Treasury and Finance Ministry said it will issue state enterprise income-indexed domestic bonds to encourage Turkish citizens to make savings in TRY assets and to extend its investor base. The book-building transactions for income-indexed government debt securities (GES) will start by June 15, the Treasury statement read. GES will only be offered to real persons. The announcements came after the Treasury said in a statement that a series of new “solution-oriented steps” would be announced on Thursday evening for an economy beleaguered by surging inflation and a sliding TRY, according to Reuters. Banking sources said this new instrument, which was implemented before, won’t be a solution for fluctuations in the market. They also stated that the percentage of the interest rate will be important for this instrument.
Another move came from the Banking Regulation and Supervision Agency (BDDK) following the announcement of GES. The maturity limits for consumer loans have been reduced and the minimum payment amount for credit cards has been raised for credit cards, according to a statement from the BDDK. The banking sources said these measures have been taken against the assumption that the demand for retail loans raises the general price limits and triggers the demand for FX. They emphasized that it will influence consumer loans. Moreover, the BDDK also said it is working to offer swap opportunities allocated for foreign funds.
The Capital Market Boards of Turkey (SPK) also announced measures aligning with steps announced by the Treasury and Finance Ministry to strengthen financial stability. SPK stated that the Commodity Market has been set up in the care of the Borsa Istanbul Stock Exchange and they are working to issue the gold certificate.
USD/TRY, which is traded on international markets, fell to 16.87 following the Treasury’s first statement about these economic policies but then rose to 17.21 after the steps were announced. USD/TRY is traded at 17.20 this morning.
Turkey’s benchmark stock index was at 2,571.57 points at yesterday’s close, up 1.23%. Borsa Istanbul’s BIST 100 index earned 31.21 points from the previous close of 2,540.36 points. The total market value of the BIST 100 was around TRY 2.09tr by market close, with a daily trading volume of TRY 46.5bn.
President Recep Tayyip Erdogan stated the general elections will be held on time, in mid-June of next year. Speaking at AK Party’s Provincial Advisory Council Meeting Erdogan also announced that he will seek another term in next year’s polls. “The People’s Alliance’s candidate for presidential elections is Recep Tayyip Erdogan,” he said, referring to the voting and electoral alliance between the AK Party and Nationalist Movement Party (MHP).
DAILY AGENDA
The unemployment rate increased by 0.1 points to 11.3% in April, ccompared to the previous month, according to the Turkish Statistical Institute (TurkStat).
The Construction Cost Index (CCI) jumped 106.60% in April, year-over-year, according to TurkStat. The CCI surged by 6.12% on a monthly basis.
The overall export unit value index increased by 13.3% and the export volume index rose by 10.0% in April, compared to the previous month, according to TurkStat. The overall import unit value index climbed by 39.4% while the overall import volume index dropped by 3.2% in the same period.
Meanwhile…
>> SPK has increased Isbank’s capital increase through bonus issues. Thus, the bank’s capital will rise from TRY 4.5bn to TRY 10bn.
>> The total amount in FX-protected TRY deposit accounts rose by TRY 26.9bn from TRY 904.1bn to TRY 931bn in the week ending on June 3, compared to the previous week, according to the BDDK.
>> The banking sector’s total loan volume increased by TRY 92.5bn from TRY 6.03tr to TRY 6.12tr in the week ending on June 3, compared to the previous week, according to the BDDK.
>> Residents’ FX deposit accounts surged by USD 673m in the week ending on June 3, compared to the previous week, according to the parity adjusted data from the Central Bank.
>> Foreign investors’ net equity acquisitions totaled USD 129.4m while their net government debt securities (GDS), and corporate bond outflows from Turkey totaled USD 1.6m and USD 5.2m, respectively, in the week ending on June 3, according to the Central Bank.
>> The Central Bank’s international net reserves declined by USD 1.68bn to USD 10.51bn in the week ending on June 3, compared to the previous week. The bank’s total reserves fell by USD 156m to USD 102.74bn in the same period.
