What matters on Wednesday, August 24

The banking sector, which had high profitability in the first half of the year, hit record highs on Borsa Istanbul. The hike in Borsa Istanbul’s Banking Index has been 93.5% since the beginning of the year and 45% over the last month. The index gained 7.7% yesterday. Apart from banks’ low cost and high profitability structure, their cheap stocks make the stock exchange an unrivaled investment instrument. The highest investment was made by foreign investors at nearly USD 2.6bn in Citibank while the position change of Deutsche Bank amounted to USD 680m.

The Turkish Industrialists and Businessmen’s Association (TUSIAD) made a statement regarding the letter received from U.S. Deputy Treasury Secretary Wally Adeyemo. TUSIAD said it had shared the letter with the Foreign Minşstry, the Treasury and Finance Ministry, and the Trade Ministry. The Wall Street Journal (WSJ) previously alleged that Adeyemo sent a letter to TUSIAD warning of possible sanctions risks if companies establish relations with sanctioned Russian entities and individuals. “The Biden administration warned Turkish businesses against working with sanctioned Russian institutions and individuals, intensifying U.S. pressure on a NATO ally that has maintained a strong relationship with Russia during its invasion of Ukraine,” WSJ said. Adeyemo, who visited Turkey in June, told Deputy Treasury and Finance Minister Yunus Elitas last weekend about his concerns that Russian entities and individuals were attempting to use Turkey to avoid sanctions. Elitas verified at the meeting with Adeyemo that no sanctions would be breached, according to a statement from the Treasury and Finance Ministry.

Treasury and Finance Minister Nureddin Nebati announced in a televised interview with broadcaster NTV two new support packages for low-income people. Touching on the recent loan regulation, Nureddin Nebati said it was aimed at a decline in interest rates. “Loan interest rates will most likely approach the Central Bank’s interest rates,” Nebati added. He also noted that The Turkish economy is estimated to grow by over 7.3% in the second quarter.

Those, who will have an income below TRY 16,000 in Istanbul and below TRY 14,000 in other cities will be able to apply to the Housing Development Administration (TOKI) for a new social housing project that will be announced by President Recep Tayyip Erdogan in detail on September 13. TOKI will provide a maturity opportunity of up to 240 months, according to Environment, Urbanization and Climate Change Minister Murat Kurum. A quota of around 20% will be opened for those aged below 30. “Payments shouldn’t exceed 30% of total household income,” Kurum added.

On the foreign policy side, National Defense Minister Hulusi Akar and US Defense Secretary Lloyd Austin discussed the NATO alliance as well as bilateral and regional issues over the phone. Akar and Austin exchanged views on defense and security issues, especially developments in Ukraine, the fight against terrorism, and talks on the U.S. selling Turkey F-16 fighter jets and upgrade kits, said the National Defense Ministry statement. The ministry gave no further details. Previously, Akar said the fourth round of technical talks between Ankara and Washington on the sale of F-16 fighter jets was going positively.


No important data will be released in the country.


>> Turkey’s raw steel production dropped by 20.7% to 2.7 million tons in July, year-over-year, according to the World Steel Association (Worldsteel). Global raw steel production declined by 6.5% to 149.3 million tons in the same period.

>> The amount of investment made by electricity distribution companies rose by 56.7% from TRY 9.4bn to TRY 14.7bn in 2021, compared to the previous year, according to a report prepared by the Association of Electricity Distribution System Operators (ELDER). TRY 11.7bn was invested in the network systems.

>> The asset size of the non-banking finance industry including the companies operating in factoring, financial leasing, financing, and asset management sectors totaled TRY 292.8bn in the first half (H1) of the year, according to the Association of Financial Institutions (FKB). Their transaction volume reached TRY 247.2bn in the same period.

>> The portfolio of Isbank’s leasing arm Is Leasing rose by 27% to TRY 14.5bn in H1, compared to the end of 2021. The institution’s asset size totaled TRY 17.8bn in H1.

>> The number of confirmed monkeypox virus cases has risen to 11 as of August 23 in the country, according to Health Minister Fahrettin Koca. He also said the number of daily coronavirus cases hovers around 10,000. 


>> That’s how the policy rate cut is!

Our Eco Analysis Columnist Alaattin Aktas examines the policy rate cut justification of the Central Bank.

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