What matters on Tuesday, February 8

Treasury and Finance Minister Nureddin Nebati held one-to-one meetings with executives of various banks and investors in London. Nebati tweeted that Turkey’s new economic model was explained in the meetings and opinions were exchanged between parties. The Treasury and Finance Minister will continue meetings today. Nureddin Nebati told the Japanese finance newspaper Nikkei Asia last week that in his London visit he would explain to investors that there will be no interest rate hike and no return from the economic policy the government has implemented.

The Turkish economy is estimated to grow by over 10% in 2021 and differentiate itself from the world, according to Emre Kartaloglu, President of the Union of Chambers of Certified Public Accountants of Turkey (TURMOB). However, Kartaloglu said the growth hasn’t resolved the unemployment problem, has triggered inflation, hasn’t increased per capita income, and deteriorated income distribution. Touching on the foreign exchange (FX) rate hike towards the end of last year, he also added: “In line with the new economic model, TRY devaluation was supposed to raise exports and reduce imports as imported goods will become more expensive.  The model also had to ensure the current account balance. However, FX rates were controlled with a contradictory policy on December 20, when FX-protected TRY deposit accounts entered into service. Solving FX rate issues just by intervening in line with demand conditions will pave the way for these issues to be postponed and emerge stronger when inflation increases.”

Natural gas supply cuts at industrial facilities have been removed as of 8.00 AM, according to a statement from BOTAS Petroleum Pipeline Corporation (BOTAS). Turkey required limited natural gas consumption at industrial facilities and gas-fired power plants after Iran suspended natural gas flows to Turkey as of January 20 due to a technical malfunction, and residential consumption reached a record level due to the extreme cold. Natural gas supplies were cut by 40%, then cuts were reduced to 20%.


The Ministry of Treasury and Finance will release the average maturity and cost of domestic borrowing and the total domestic debt roll over ratio for January (5.30 pm).

Foreign Minister Mevlut Cavusoglu will hold a press conference with his Finnish counterpart Pekka Haavisto (1.45 pm).

Treasury and Finance Minister Nureddin Nebati will hold two separate meetings with investors in London.


>> Inflation broke another record with price hikes in January

The annual inflation rate, which jumped to 48.69%, hit a 20-year high in January, seeing its highest level since 2002. Annual inflation will exceed 50% in February and its peak will surpass 60%, according to market forecasts. The negative interest rate provided by Turkey, meanwhile, rose to 34.69%, the highest among developing countries.

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