We are entering a calmer week compared to the abnormal mobility of last week. Although the agenda was not too busy in terms of economic data, we have passed through an unprecedented period in terms of mobility in the markets.
Foreign exchange (FX) intervention, FX protected TRY deposits, and a nearly 40% fall in FX rates filled the agenda.
The Central Bank (TCMB) has been reducing the policy rate since September 23. The policy rate fell from 19% to 14%. Despite the 5-point reduction, the deposit rate decreased by 2.5 points, according to the TCMB data released on December 17. Housing loan rates decreased by 0.6 points and commercial loan rates by 0.7 points. Consumer and vehicle loan interest rates increased by two and 1.1 points, respectively.
On the other hand, the government bond rates have increased by 3-4 points depending on their maturity. Official data for the last week, in which there was a sudden decrease in FX rates, has not been released yet. However, many banks began to increase deposit rates. There are deposit interest rate offers with a maturity of 32 days, reaching 21%. In other words, we do not see harmony between the market rate and the policy rate yet.
This week, we will see that the volatility will continue albeit at a smaller pace. The data calendar this week includes sectoral confidence, real sector confidence, and economic confidence indices. In general, it is difficult to expect upward mobility in these. No major developments are expected abroad due to the Christmas holiday. We conclude 2021 with this data. Hopefully, 2022 brings a better economic environment.
DAILY AGENDA
The seasonally adjusted confidence index dropped by 0.5% in the services sector, 0.4% in the retail trade sector and 3.9% in the construction sector in December, as compared to November, according to the Turkish Statistical Institute (TurkStat).
The Real Sector Confidence Index dropped by 2.3 points to 106.1 in December, compared to the previous month, according to the Central Bank.
The capacity utilization rate of the manufacturing industry rose by 0.6 points to 78.7 in December, month over month, according to the Central Bank.
IN OUR MAGAZINE THIS WEEK
>> On the cover: The corporate software company Etiya is preparing to become a unicorn in three years by developing in metaverse, according to Aslan Dogan, Co-Founder and CEO of Etiya. The company, which has offices in Singapore, Silicon Valley, Dubai, Amsterdam, Lviv, and Montreal, as well as in Turkey, aims to become a global player in the software industry with the investment it has received from one of Canada’s largest groups, the telecom, media, sports, and entertainment giant Quebecor. You can read the details about Etiya’s future plans on pages 14 and 15.
>> Professor Ilter Turan: It is not a good idea to rely on others to initiate conflicts. P. 10.
>> Diplomacy: Devaluation in TRY affects German companies: DIHK. P. 11.
>> In our Q&A section on pages 12-13, you can read about Turkey’s machinery sector, which was detailed by Ahmet Ozkayan, Vice Chairman of the Board of Directors and General Manager of ERMAKSAN and Member of the Board of Directors of the Turkish Machine Manufacturers Association (MIB).
>> Startup: Cloud Marketing to organize a summit for the hosting industry. P. 16.
>> Zeynep Gurcanli: Is it the rise of the left? P. 19.
>> Energy: Turkey to integrate Azerbaijan into Europe using pipelines. P.22.
