The sharp decline in foreign exchange (FX) rates last week has given place to the surge this week. USD/TRY rose by 7% to 12.60 yesterday. Speaking in a televised interview with CNN Turk, Treasury and Finance Minister Nureddin Nebati said the recent fluctuations in USD/TRY was a natural oscillation of the decline of FX rate from 18.00. “Everything is under control. FX rates will normalize with oscillations following the radical decrease,” Nebati noted. USD/TRY starts the day at 12.56 this morning.
Following the FX-Protected TRY Deposit Accounts implementation, the Central Bank will give incentives to encourage residents who will shift from gold to TRY deposits, according to a statement from the bank. The move is a part of the bank’s strategy to back up TRY. “The Central Bank will provide incentive to deposit and participation fund holders in the event that they convert their gold deposits and participation funds into TRY deposit accounts,” the statement read.
The Central Bank (CBRT) left the medium-term inflation target at 5% in the Monetary and Exchange Rate Policy Report for 2022. The bank will work to strengthen its reserves in line with the report, which didn’t include statements about the tight monetary policy. Although financial stability was emphasized in the report, statements about the tight monetary policy, which was highlighted in the previous report, were removed as it was in the Monetary Policy Committee (PPK) statements. The bank underlined that it would continue to implement the floating exchange rate regime and that free-market conditions will continue to determine exchange rates.
Economic confidence index dropped by 1.8% from 99.3 to 97.6 in December as compared to November, according to the Turkish Statistical Institute (TurkStat).
The Central Bank and the Banking Regulation and Supervision Agency (BDDK) will release weekly money and banking statistics (2.30 pm).
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It has not escaped the attention of observers of Turkish foreign policy that the current Greek government is pursuing an active policy of mobilizing neighbors, friends, and allies against Turkey to isolate it in the region by limiting its access to the sea, rendering it militarily weaker by both increasing its military capabilities and ensuring the support of other powers including the US, the EU, and its members. Our Geo-politics columnist Prof. Ilter Turan examines Greece’s strategies and approaches for Turkey in this respect.