Union of Chambers and Commodity Exchanges of Turkey (TOBB) President Rifat Hisarciklioglu, who hosted Central Bank (CB) Governor Sahap Kavcioglu last week at the TOBB Sector Assemblies joint meeting, will bring together public bank executives with the real sector today. Alpaslan Cakar, Chairman of the Banks Association of Turkey (TBB) and CEO of Ziraat Bank, Osman Arslan, General Manager of Halkbank, and Abdi Serdar Ustunsalih, General Manager of Vakifbank, will attend the meeting at TOBB headquarters. The real sector representatives told CB Governor Kavcioglu at the last Istanbul Chamber of Industry (ISO) Assembly meeting that they are having difficulties in accessing loans and loan costs have exceeded 40% despite the low policy rate. In reply, Kavcioglu accused manufacturers of carrying high raw material stocks and purchasing foreign currencies (FX) using cheap loans. Then, he stated at the TOBB Sector Assemblies joint meeting that his expression about ‘stockpiling’ was misunderstood. TOBB President Rifat Hisarciklioglu highlighted at the same meeting that some banks charge a 30%-50% interest rate for commercial loans while others don’t provide loans at all in a period when the CB’s interest rate for funding stands at 14% and the average interest rate for deposit accounts hovers around 20%.
Turkey’s 5-year credit risk premium (CDS) have started to decline after reaching 900 points. The country’s CDS, which has had a downward trend for the last three weeks, fell to 703 points yesterday. The decrease stemmed from FX flowing into Turkish coffers, according to sources at the Treasury and Finance Ministry. Sources said USD 5bn from Russia has recently entered the accounts and USD 2bn is to come. They also added that they expect a USD 20bn inflow, including USD 10bn from Saudi Arabia, in the coming days. The FX flow into the country is expected to be held in deposit accounts or government debt securities (GDS).
Treasury and Finance Minister Nureddin Nebati rejected claims by IYI Party Economy Policies Head Prof. Dr. Bilge Yilmaz, who said that Turkey borrowed from the International Monetary Fund (IMF). Nebati twitted that neither has an agreement been signed nor has a program with the IMF been has introduced. Yilmaz previously stated in a television program that the CB holds USD 6.5bn borrowed from the IMF.
Turkey’s seventh-generation drill ship, the Abdulhamid Han, has set off for its first two-month-long mission in the Mediterranean. The ship, dubbed the strongest of the current fleet, will drill exploration wells in the Eastern Mediterranean, Energy and Natural Resources Minister Fatih Donmez said during the farewell ceremony of the vessel at the Tasucu port in Mersin. “The wells drilled will provide confirmation of our previous seismic data and a better understanding of underground structures,” Donmez added. The country’s other ships, Yavuz and Kanuni, will continue drilling operations in the Black Sea in preparation for the delivery of gas next year, he noted.
DAILY AGENDA
The Construction Cost Index (CCI) jumped 106.87% in June, compared to the same month last year, according to the Turkish Statistical Institute (TurkStat). CCI rose by 3.47% on a monthly basis.
The seasonally adjusted unemployment rate dropped by 0.3 percentage points to 10.3% in June, month over month, according to TurkStat.
Meanwhile…
>> The asset size of Vakifbank rose by 76% to TRY 1.3tr in the first half of the year, compared to the same period of the previous year. The bank injected TRY 965bn into the national economy through cash and non-cash loans in the same period. The net profit of Vakifbank totaled TRY 10.01bn in this period.
>> Three Turkish firms are among the world’s 100 biggest defense and aerospace companies, as ranked by revenue by the U.S.-based website Defense News. Aselsan was listed at 49 and Turkish Aerospace Industries (TAI) was listed at 67. Roketsan was ranked 86, according to the 2022 list.
>> The amount of cargo handled by Turkey in January-July increased by 6.6% to over 319 million tons in 2022 as compared to January-July 2021, according to Transport and Infrastructure Minister Adil Karaismailoglu. The figure for handled containers rose by 2.1% to 7.36 million TEU in the same period.
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>> Foreign actors unavailable; shall we blame domestic actors?
Our Eco Analysis Columnist Alaattin Aktas criticizes the conversation between CB Governor Sahap Kavcioglu with ISO members at the ISO Assembly meeting in light of macroeconomic developments.
