This week, the Central Bank (CB) will decide whether to stop interest rate cuts or maintain the policy. The interest rate decision will be announced after the Monetary Policy Committee (PPK) on Thursday. As it is getting harder to give the same answer to questions of “what should be” versus “what will happen”, it is not possible to predict what steps will be taken by the CB regarding interest rates. However, we can make the following inference. As USD/TRY approached 14.00, the CB initiated three foreign exchange (FX) auctions. Whether the intervention was successful is debatable. However, the perception that the bank did not want higher levels became clear. The bank, which cannot lower the rate by selling FX, can try to do it by limiting the interest rate cut. In other words, we may see a more limited discount than previously, likely with a maximum of 100 basis points. Let’s note there is also the possibility they don’t make a discount, even a very low one.
Apart from the interest rate, industrial production, and balance of payments for October, housing sales, and the housing price index for November will come to the fore this week.
We started the week with October industrial production numbers. Industrial production index surged by 0.6% in October, compared to the previous month, according to the Turkish Statistical Institute (TurkStat). The index rose by 8.5% on a monthly basis.
On the other hand, the current account balance posted USD 3.1bn surplus, according to the Central Bank.
Retail sales volume rose by 15.2% in October, compared to the same month of the previous year, according to TurkStat. Retail turnover increased by 38.4% in the same period.
Total turnover index surged by 47.5% in October, compared to the same month of the previous year, according to TurkStat. The index climbed by 6.4% on a monthly basis.
IN OUR MAGAZINE THIS WEEK
On the cover: Häfele Turkey and Regional CEO Hilmi Uytun is in our cover this week to tell you about Häfele’s production plans in Turkey. The hardware store Häfele will consider production in Turkey next year, as the country has all of the systems and infrastructure necessary for production, according to him. “Turkey is also growing quickly in the furniture sector. The domestic industry, which is now USD 3.5bn in size, is expected to reach USD 5-10bn in the medium term and USD 20-30bn in the long term,” he says. You can read the details on pages 14-15.
>> Professor Ilter Turan: Democracy summit or democratic ramblings. P. 10.
>> Q&A: Prof. Dr. Mehmet Zahmakiran, Vice Rector of Bartin University. P. 11.
>> Turkey’s exports to the U.S. increased by 45%, according to Mehmet Ali Yalcindag, Chairman of the Foreign Economic Relations Board (DEIK) Turkey-USA Business Council (TAIK). You can read the details in our Diplomacy section on page 12.
>> Startup: Isbank to serve startups with its entrepreneurship branch. P. 16.
>> Tourism: New roadmap for the economy and tourism. P. 18.
>> Zeynep Gurcanli: Troubled times with the West. P. 19.
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