What matters on Friday, September 23

The Central Bank’s Monetary Policy Committee (PPK) shockingly cut the policy rate from 13% to 12%. Thus, the PPK reduced the interest rate for the second consecutive month this year.

USD/TRY reached 18.42, breaking another record after the bank’s decision. Then it edged back to 18.36 following the sales. USD/TRY is traded at 18.39 this morning.

The bank reduced the policy rate by 100 basis points on the grounds that leading indicators have continued to indicate a loss of momentum in economic activity for the third quarter due to decreasing foreign demand and that financial conditions should remain supportive to preserve momentum in industrial production and the positive trend in employment.

Economists expect another 100-basis point rate cut at the next PPK meeting in October. The fact that the bank emphasized throughout the PPK statement economic data such as growth, employment, foreign demand, and tourism and did not mention inflation and price stability, increased expectations that the institution would put inflation into the background.

President Recep Tayyip Erdogan plans to gather officials on Friday to make a final decision about the Russian payment system Mir. Touching on the sanctions on Russia, President Erdogan added: “Mir Card has been a bridge between Russia and Turkey. Relevant Ministers are in talks about alternatives. I’ll gather all relevant colleagues in Istanbul on Friday following the talks and we’ll make a final decision.” Isbank and Denizbank stated on Monday that they have suspended the usage of Mir following a U.S. crackdown on those accused of helping Moscow skirt sanctions over the war in Ukraine.

Meanwhile, Turkey’s benchmark stock index ended yesterday at 3,295.27 points, increasing 1.79% from the previous close. Starting the day at 3,288.86 points, Borsa Istanbul’s BIST 100 index gained 49.51 points from Wednesday’s close of 3,245.76 points, with a daily trading volume of TRY 61.4bn. The index’s lowest value during the day was 3,288.14, while its daily high was 3,298.22 points.

Turkey’s trade volume with the U.S. will reach USD 100bn “soon” if the current momentum is kept up, according to President Recep Tayyip Erdogan. Speaking at an investment event hosted by the Turkey-US Business Council in New York, President Erdogan said the bilateral trade volume increased by nearly 30% in the first eight months of this year compared to the same period of the previous year and reached USD 22bn. Erdogan also said direct investments from the U.S. in Turkey reached USD 14.1bn and Turkish companies’ investments in the U.S. reached USD 8.6bn.


No important data will be released in the country.


>> Foreigners’ net corporate bond acquisitions amounted to USD 14m, while their equity and government debt securities from Turkey totaled USD 34m, and USD 48.7m, respectively, in the week ending on September 16, according to the Central Bank.

>> Residents’ FX deposit accounts rose by USD 1.64bn in the week ending on September 16, according to parity-adjusted data from the Central Bank.

>> The Central Bank’s international net reserves declined by USD 2bn to USD 12.09bn in the week ending on September 16, compared to the previous week. The bank’s total reserves increased by USD 1.05bn to USD 114.7bn in the same period.

>> The total amount in FX-protected TRY deposit accounts (KKM) reached TRY 1.34tr in the week ending on September 16, according to the Banking Regulation and Supervision Agency (BDDK).

>> The banking sector’s loan volume surged by TRY 29.07bn to TRY 6.71tr while its total deposits climbed by TRY 98.81bn to TRY 7.97tr in the week ending on September 16, compared to the previous week, according to BDDK.

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