Companies and legal persons will be able to convert their USD, EUR, and GBP accounts in banks to TRY any time between December 31, 2021, and September 30, 2022, according to an amendment in the FX-protected TRY deposit accounts (KKM) published in the Official Gazette.
President Tayyip Erdogan said he advised the Central Bank to lower its policy rate at its upcoming meetings, a day after saying he expects interest rates to come down to single digits by year-end, according to Reuters. Speaking at the 21st Ordinary General Assembly of the Confederation of Turkish Tradesmen and Craftsmen (TESK), President Erdogan repeated his unorthodox view that lower rates will lead to lower inflation. “My biggest battle is against the interest rate. My biggest enemy is the interest rate. We lowered it to 12%. Is that enough? It is not enough. This needs to come down further,” Erdogan said. “We have discussed, are discussing this with our Central Bank. I suggested the need for this to come down further in upcoming Monetary Policy Committee meetings,” he added.
Treasury and Finance Minister Nureddin Nebati said every country has different dynamics and therefore their solutions may differ. Speaking at the Economic Transformation and New Paradigms summit hosted by the Treasury and Finance Ministry, Nureddin Nebati stated that Turkey would have faced a recession along with high inflation and many related problems if the new economic model hadn’t been implemented. Nebati also added that the primary objective of the Turkey Economy Model is to ensure the economy enters sustainable growth and overcomes the middle-income trap in the long term.
The Central Bank released the summary of the Monetary Policy Committee (PPK) meeting held on September 22, when it reduced the policy rate by 100 basis points. The bank stated in the summary that the liraization-oriented approach in monetary policy will continue.
Recep Tayyip Erdogan reiterated Turkey’s willingness to play a facilitator role to help end the war in Ukraine and called on his Russian counterpart Vladimir Putin to give negotiations with Ukraine another chance over the phone, according to a statement from the Communications Directorate. Extension of the grain export deal is a common interest, President Erdogan said. The grain export mechanism will expire in November, but Erdogan added that efforts also continue for the export of Russian grain and fertilizers. Erdogan also pointed out the need for steps to reduce tensions in the region and said Russia is expected to take decisive, particularly on the annexation of Ukraine’s Donetsk, Luhansk, Kherson, and Zaporizhzhia regions. Putin told Erdogan that the Nord Stream leaks are an “act of international terrorism” and reminded him that Russia is bringing this issue up for urgent discussion in the UN Security Council, according to a statement by Kremlin. The two leaders also agreed to continue the Russian-Turkish dialogue in various formats, the Kremlin statement read.
The Turkish Statistical Institute (TurkStat) will release foreign trade statistics for August (10.00 a.m.).
TurkStat will release the Services Producer Price Index for August (10.00 a.m.).
>> The Economic Confidence Index remained unchanged at 94.3 points in September, according to TurkStat.
>> The U.S.-based Standards and Poor (S&P) upgraded Turkey’s economic growth forecast by 1.7 points to 5.2% for 2022 and 1.1 points to 2.8% for 2023.
>> Residents’ FX deposit accounts fell by USD 2.75bn from USD 213.16bn to USD 210.41bn in the week ending on September 23, compared to the previous week, according to the Central Bank.
>> The Central Bank’s total reserves dropped by USD 3.93bn from USD 114.73bn to USD 110.8bn in the week ending on September 23, compared to the previous week.
>> The net profit of the banking sector increased from TRY 38.72bn to TRY 44.35bn in August, compared to the previous month, according to the Banking Regulation and Supervision Agency (BDDK). The sector’s 8-month net profit reached TRY 252.2bn.
>> The asset size of the banking sector rose by TRY 3.4tr to TRY 12.69tr in August, compared to the end of 2021, according to BDDK.