Economic growth and exports will slow while an increasing external finance need will pressure TRY and raise the upward risks of inflation in the second half of the year, according to Marco Valli, Global Research Head of the Italy-based UniCredit. Valli told daily DUNYA that the slowdown in exports will raise the current account deficit (CAD) and the decrease in EUR/USD parity will increase deterioration in the foreign trade balance and adversely affect the CAD. Valli also said the slowdown in European economies will create downward pressure on the growth of the Turkish economy as exports to the European Union (EU) account for over 40% of the country’s total exports. He also reiterated that the annual growth rate of Turkey’s goods exports has already slowed since the second quarter of the year. Turkey’s access to cheap energy can make some positive contribution to its exports and exports will be the second biggest contributor to the economic growth in 2022 after private consumption, according to Valli. However, he also said this is mostly a reflection of the strong performance in the first half of the year.
Turkey’s benchmark stock index ended yesterday with losses, down 2.43% to 3,363.12 points. After starting the day at 3,452.15 points, Borsa Istanbul’s BIST 100 index fell 83.84 points from Wednesday’s close of 3,446.96 points. The total market value of the BIST 100 was around TRY 2.7tr by close, with a daily trading volume of TRY 81.7bn. The volatility has increased in the global markets due to concerns over inflation, the recession, and the fact that the Federal Reserve (Fed) will continue its ‘hawkish’ stance at the meeting to be held next week, according to analysts. They emphasized that the fluctuant course may continue until the Fed meeting. Analysts also said 3,280 and 3,360 points will be the support level as well as 3,500 and 3,550 points will be the resistance level f1or the BIST 100 index, in technical terms.
Today, President Recep Tayyip Erdogan will attend the 22nd Meeting of the Council of Heads of State of the SCO as a special guest, with Turkey taking part at the presidential level for the first time since Ankara obtained SCO dialogue partner status in 2012. Erdogan is expected to address the second session of the summit and hold bilateral meetings with leaders, including Putin and his Chinese counterpart Xi Jinping. The grain export deal signed in July by the UN, Turkey, Russia, and Ukraine will be discussed during the talks between Erdogan and Putin.
More than three million tons of grain have been safely shipped from Ukrainian ports since August under the grain deal, according to a statement from the National Defense Ministry. At least 144 ships have left Ukraine since the deal and 161 empty ships have left for Ukrainian ports to get grain. Additionally, 11 more grain-laden ships have left Ukrainian ports under the Istanbul grain export deal yesterday.
DAILY AGENDA
The short-term external debt stock surged by 10.7% to USD 134.6bn in July, compared to the end of 2021, according to the Central Bank.
The Central Bank will release the Residential Property Price Index for July (2.30 p.m.).
Meanwhile…
>> The central government’s budget balance posted a TRY 3.6bn surplus in August, and a TRY 33.13bn surplus in January-August, according to the Treasury and Finance Ministry. The cost burden of the FX-protected TRY deposit accounts (KKM) amounted to TRY 15bn in August. Thus, the total cost has reached TRY 75.61bn since March.
>> Foreign investors’ net equity, government debt securities, and corporate bond outflows from Turkey totaled USD 13.5m, USD 24.8m, and USD 0.6m, respectively in the week ending on September 9, according to the Central Bank.
>> Residents’ FX deposit accounts rose by USD 663m in the week ending on September 9, according to parity-adjusted data from the Central Bank.
>> The Central Bank’s international net reserves rose by USD 2m to USD 14.08bn in the week ending on September 9, compared to the previous week. The bank’s total reserves increased by USD 1.75bn to USD 113.68bn in the same period.
>> The total amount in FX-protected TRY deposit accounts (KKM) reached TRY 1.31tr in the week ending on September 9, according to the Banking Regulation and Supervision Agency (BDDK).
>> The banking sector’s loan volume surged by TRY 42.15bn to TRY 6.69tr while its total deposits climbed by TRY 106.14bn to TRY 7.87tr in the week ending on September 9, compared to the previous week, according to BDDK.
>> Russia’s natural gas exports to EU countries this year are estimated to drop by 50 billion cubic meters, according to Russian Deputy Prime Minister Alexander Novak. Novak also said Russia may provide additional volumes to Turkey if required.
