President Recep Tayyip Erdogan made a statement about YUVAM accounts, which has been implemented for non-residents to bring their savings and protect them against foreign exchange (FX) volatility. “YUVAM is a financial instrument. It ensures a guarantee of 4% return in FX (foreign exchange) terms,” President Erdogan said at the AK Party Group meeting. Erdogan also reiterated the statement of the Labor and Social Security Minister Vedat Bilgin that the Ramadan Holiday bonus for retirees to be TRY 1,100.
Turkey’s benchmark stock index Borsa Istanbul broke another record yesterday. The BIST 100 Index gained 0.27% to close at a new record high of 2,525.93 points yesterday. Starting the day at 2,528.24 points, the index increased 6.69 points from Tuesday’s close of 2,519.24 points. Its total market value was more than TRY 2.05tr by market close, with a daily trading volume of over TRY 44.1bn.
Global markets have pushed the Russia-Ukraine war into the background and volatility in the markets continues to increase due to the expectation that central banks will take tightening measures and that inflation will continue to rise, according to Murat Barisik, Research Director of Ata Yatirim. Barisik says the surge in the BIST 100 index may continue due to financial statements and expectations from companies. “As long as the index doesn’t fall below 2,490 points, the 5-day average, it will continue to increase up to 2,500 points in the short-term,” Barisik added. Technical indicators indicate that instant sharp withdraws may happen from time to time in the overbought zone. “In case the support level of 2,490 points is broken in the index, profit sales would be made up to the support level of 2,460 points,” Barisik noted. Ata Yatirim suggests adding companies with a solid foundation and story that will increase their Q1 profitability to your investment portfolio. Barisik named TAV Airport, Birlesik Magazalar AS (BIM), Arcelik, Migros, Turk Telekom, and Sisecam as examples.
TRY devaluation is resulting from a high inflation environment and economic turmoil caused by this environment, according to Levent Altinoglu, Senior Economist of the Financial Stability Department of the Board of Governors of the Federal Reserve. Speaking in an exclusive interview with daily DUNYA, Altinoglu said unconventional measures designed to support TRY will only provide temporary support to the foreign exchange rates as long as easy monetary policy is maintained in such an environment. Altinoglu noted that such implementations may create an adverse impact and raise inflation in the medium term which may pave the way for FX rates to further increase. Altinoglu pointed out that the difference in real interest rates in Turkey and developed countries will further increase as the interest rates in developed countries will surge due to rising inflation. He says this difference will reflect on FX rates in the medium term. Altinoglu also added that the Central Bank may have some difficulty in paying the borrowed FX and this may harm banks in the country if the FX inflow to Turkey through foreign direct investments and exports is insufficient. Moreover, in case the Central Bank pays the borrowing in TRY, this will further raise inflation, according to the Federal Reserve Economist.
DAILY AGENDA
Consumer confidence index dropped by 7.3% from 72.5 to 67.3 in April, month-over-month, according to the Turkish Statistical Institute (TurkStat).
The Agricultural Input Price Index (Agriculture-IPI) jumped 80.99% in February, compared to the same month last year, according to TurkStat. Agriculture-IPI climbed by 16.69% on a monthly basis.
The Central Bank will release the summary of the Monetary Policy Committee meeting held on April 14 (2.00 pm).
The Parliament will continue to discuss the legislative proposal for the Law on Sports Clubs and Sports Federations (2.00 pm).
The Banking Regulation and Supervision Agency (BDDK) and the Central Bank will release weekly money and banking statistics (2.30 pm).
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