The long-awaited decision of the CBRT came with a 100-basis point decrease in the key one-week repo rate. A downward signal was given a few weeks ago with the change in the benchmark that determines the direction of core inflation. Coupled with the change in the communication strategy, Governor Sahap Kavcioglu could only resist political pressures for a few months, or literally five Monetary Policy Committee meetings.
He was the most hawkish critic of the former Governor Naci Agbal, his predecessor. However, he was forced to keep the rates flat for a couple of months, on a sensitive track. As readers of our editorial column may remember, we underlined the market’s reaction to the potential decrease in the policy rate. But when a gun is taken out, it should be shot, as a Turkish proverb says. And one shouldn’t forget that it has consequences. You can read the details in our print magazine.
This week the Central Bank will announce international reserves and foreign currency liquidity statistics for tomorrow. On the other hand, Treasury and Finance Minister Lutfi Elvan and the Central Bank Governor Sahap Kavcioglu will attend a symposium tomorrow. Their statements will be important in following the Monetary Policy Committee (PPK) meeting. The bank, meanwhile, will release the PPK summary on Thursday.
USD/TRY saw all-time high and exceeded 8.89 after the bank’s interest rate cut to 18%. USD/TRY hovers around the similar levels and started the week at 8.86.
The marketable lignite production dropped by 16.1% to 5.4 million tons, while the marketable hard coal production decreased by 22.9% to 77,811 tons in July, compared to the previous month, according to the Turkish Statistical Institute (TurkStat).
IN OUR MAGAZINE THIS WEEK
>> On the cover: In our cover story this week, Aysem Sargin, the Turkey Managing Director and Country Executive of Boeing, who took over the management of the International Investors Association (YASED) for second term, talks about their priorities for the new period and investment environment in Turkey. You can read the details on pages 14-15.
>> ‘The U.S. makes another move on China’, according to Professor Ilter Turan. You can see the details on page 10.
>> Q&A: Necdet Buzbas, Chairman of the Board of Directors of Turkish Food and Beverage Industry Employers Association (TUGIS). P. 11.
>> Diplomacy: Positive signals from UAE. P. 12.
>> Startup: Parasut to ‘account for’ digital future. P. 16.
>> The management consulting firm Kearney Turkey’s Managing Partner Onur Okutur says ‘a rollercoaster ride ahead in energy prices.’ You can read the details in our Energy section on page 22.
>> Zeynep Gurcanli: The era of new alliances. P. 24.
>> Do not miss Time Out alternatives for the week!