The Economic Coordination Council (EKK) convened under the presidency of Vice President Fuat Oktay. The council discussed the trends in the global economy and the outlook in the context of economic and financial developments in Turkey. It also examined the policies, macroeconomic frame, and budget sizes to be included in the 2023-2025 Medium-Term Economic Program (OVP), according to a written statement. As part of the 2023-2025 OVP, the EEK decided monitor the approach based on fiscal discipline and to continue technology-based production to grow the Turkish economy on the axis of production-employment-investment-export-current account surplus. It is also decided to include policy mechanisms that will allow people to take a more equitable share of the welfare that will emerge as a result of high-level production. As part of the fight against climate change, the council also examined the prioritization of the policy steps towards green transformation for the medium-term. “The final macro projections in the 2023-2025 OVP were represented at the EEK meeting to submit to President. The planning has been done to complete the 2023-2025 OVP in line with the schedule in the Law,” the statement read.
The Central Bank extended the range of additional required reserve liquidity for banks which can’t meet the rate set for conversion from FX (foreign exchange) accounts to TRY, according to the Official Gazette. In line with the new regulation, banks whose conversion target remains below 10% will have to allocate an additional required reserve of 5% while banks whose conversion target hovers between 10% and 20% will allocate an additional required reserve of 3%. Moreover, accounts of legal persons and companies have been included in the obligation to meet a certain rate in conversion from FX to TRY, which previously only concerned real persons’ accounts.
Third generation local and national passports have started to be manufactured. Instead of ‘Turkey’, ‘Türkiye’ will be used in the new passports which will include 36 security items, according to Interior Minister Suleyman Soylu. He also said Turkey will annually print 250,000 Hungarian passports while Hungary will also annually print 250,000 Turkish passports within the frame of the agreement signed by both parties.
Police in Albania arrested Faruk Fatih Ozer, who founded and operated the now-defunct crypto exchange Thodex. Albanian law enforcement has been trying to locate him since he reportedly fled to the country with USD 2bn of investors’ assets. Close to 400,000 people are believed to have suffered losses. Faruk Fatih Ozer was wanted for fraud with a red notice issued by Interpol.
On the foreign policy side, President Recep Tayyip Erdogan reacted to Greece over the harassment of Turkish jets carrying out reconnaissance missions over the Aegean and Eastern Mediterranean. “Greece has challenged NATO and its allies by increasing its hostile attitude, which started with harassing our airspace and aircraft and escalated to the level of a S-300 radar lockdown,” Erdogan said ahead of a celebration concert for the centenary of The Victory Day yesterday. “Greece can neither match up to us nor become an interlocutor for us politically, economically, or militarily,” he added.
The Turkish Statistical Institute (TurkStat) will release the Gross Domestic Product (GDP) for the second quarter (10.00 a.m.).
TurkStat will release the Services Producer Price Index for July (10.00 a.m.).
The Central Bank will release the monthly monetary and baking statistics for July (2.30 p.m.).
>> Turkey’s textile imports jumped 47.4% to USD 7bn in the first half of the year (H1), according to daily DUNYA. Thus, the sector posted a foreign trade deficit for the first time. It amounted to USD 185m in H1.
>> Turkey’s natural gas imports dropped by 5.6% to 3.8 billion cubic meters in June, year-over-year, according to a report prepared by the Energy Market Regulatory Authority (EPDK). Natural gas imports from Russia declined by 29.5% while gas imports from Azerbaijan rose by 39.6% in this period. Pipeline imports dropped by 13.5% and liquified natural gas (LNG) imports jumped 102% in the same period.
>> The European Bank for Reconstruction and Development (EBRD) will provide a USD 127m loan to Isbank. The financing will be used to support women-led businesses and facilitate the country’s transition to the green economy.
>> The Russia-based e-commerce platform Ozon will launch an office in Turkey. The new office, which will be set up in Istanbul will start operations this autumn to provide Russian customers with a wide range of Turkish goods.
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Our Eco Analysis Columnist Alaattin Aktas examines the 1-year change in the composition of Turkey’s domestic debt stock in the light of the fact that Turkey’s principal payment burden for its domestic debt jumped TRY 524bn and the interest rate burden soared TRY 1.7tr in the same period.