The Central Bank’s Monetary Policy Committee (PPK) cut the interest rate by 150 basis points from 10.5% to 9% in the November meeting in line with the market expectation. The policy rate, which saw single digits for the last time in May 2020 and remained there until the PPK meeting held in September 2020, fell to single digits again after 26 months. “Considering the increasing risks regarding global demand, the Committee evaluated that the current policy rate is adequate and decided to end the rate cut cycle that started in August,” the PPK statement read. The bank also said the spread between the policy rate and loan interest rates driven by macroprudential measures is being closely monitored. The PPK statement said that the policies to be implemented will be announced in the 2023 Monetary and Exchange Rate document next month. This has divided the market. Some economists interpreted that the tightening measures within the scope of the ongoing selective loan policy will continue while other economists said that constricting policies can be selectively eased.
As of December 23, the Central Bank will raise the commission rate from 3% to 8% for FX deposits held by banks whose TRY deposits remain below 50%.
Treasury and Finance Minister Nureddin Nebati emphasized on Twitter that the difference between the policy rate and loan interest rate has gradually increased. “Thus, we expect the market interest rates to similarly fall to single digits,” Nebati twitted.
Turkey’s benchmark stock index ended yesterday at a new all-time daily high close of 4,858.21 points, up 0.08%. After starting the day at 4,880.46 points, Borsa Istanbul’s BIST 100 index gained 4.05 points from Wednesday’s close. The index also saw an intraday record of 4,939.73 points, while its lowest value was 4,794.21 during the day. The total market value of the BIST 100 was around TRY 3.9tr by close, with a daily trading volume of TRY 133bn. Analysts said 4,750-4,800 points will be the support level and 4,900-4,950 points will be the resistance level for the BIST 100 index, in technical terms.
National Defense Minister Hulusi Akar talked over the phone with his Russian counterpart Sergei Shoigu to discuss bilateral and regional defense and security issues, according to a statement from the National Defense Ministry. Hulusi Akar told Shoigu that Ankara would continue responding to attacks from northern Syria after Russia asked Turkey to refrain from a full-scale Syria offensive. Akar told Sergei Shoigu that “Turkey’s priority is to prevent the terrorism threat (from northern Syria) permanently,” and said previous agreements on this issue need to be adhered to, Reuters reported based on the statement.
DAILY AGENDA
No important data will be released in the country.
Meanwhile…
>> The total amount in FX-protected TRY deposit accounts (KKM) fell by TRY 9.49bn to TRY 1.46tr in the week ending on November 18, compared to the previous week, according to the Banking Regulation and Supervision Agency (BDDK). Thus, the figure declined for the first time since the KKM implementation started on December 21, 2021.
>> Foreigners’ net equity and corporate bond acquisitions totaled USD 56.5m and USD 3.4m, respectively, while their net government debt securities outflow amounted to USD 20.5m in the week ending on November 18, according to the Central Bank
>> The size of assets managed by the portfolio management sector has reached TRY 1.12tr as of October 2022, according to the Corporate Governance Association of Turkey (TKYD).
>> The banking sector’s total loan volume increased by TRY 49.31bn from TRY 7.11tr to TRY 7.16tr and its total deposits surged by TRY 83.89, or 1%, to TRY 8.66tr in the week ending on November 18, compared to the previous week, according to BDDK.
>> The Central Bank’s international net reserves rose by USD 515m to USD 18.74bn in the week ending on November 18, compared to the previous week. The bank’s total reserves increased by USD 5.36bn to USD 122.88bn in the same period, the highest level of the year.
>> Residents’ FX deposit accounts dropped by USD 3.02bn in the week ending on November 18, compared to the previous week, according to parity-adjusted data from the Central Bank.
