What matters on Wednesday, January 18

Banking sources told daily EKONOMI that the Treasury and Finance Ministry may issue a 15-year or 20-year fixed coupon bond to meet the financing need, which will increase before the election. If this happens, the Treasury will issue a bond with a maturity of more than 10 years for the first time ever. This will be a compulsory demand due to the obligation to hold securities, according to banking sources. They also said expenditures for elections, social housing campaigns, the regulation regarding the victims of delayed pension age (EYT), and the Credit Guarantee Fund (KGF) packages have created the need for additional borrowing. Deputy Treasury and Finance Minister Murat Zaman told daily EKONOMI that such a bond issuance is possible in theory.

Treasury and Finance Minister Nureddin Nebati said inflation is the only problem of Turkey. “However, it has had a downward trend over the past two months, and this downward trend will continue. Because the global commodity and energy prices have started to normalize and the volatility in foreign exchange rates has declined,” Nebati added.

The legislative proposal for EYT is likely to be submitted to the parliament next week, according to AK Party Group Deputy Chairman Muhammet Emin Akbasoglu. He also stated that those, who will benefit from the EYT regulation will start to receive their salaries by March.

Turkey’s benchmark stock index ended yesterday at 5,315.03 points with an increase of 2.06%. Borsa Istanbul’s BIST 100 index, which fluctuated during the day, gained 107.36 points from the previous close with a daily trading volume of TRY 124.9bn. The global equity markets have a fluctuant course due to the cautious approach to economic growth despite the improvement in inflation expectations, according to analysts. They also said 5,100 points will be the support level and 5,340 points will be the resistance level for the BIST 100 index, in technical terms.

On the foreign policy side, Foreign Minister Mevlut Cavusoglu embarked on a three-day official visit to the U.S. yesterday to discuss bilateral relations and regional issues, according to a statement from the Foreign Ministry. “Cavusoglu will hold a bilateral meeting with U.S. Secretary of State Antony Blinken on the Turkey-U.S. Strategic Mechanism in Washington today,” the statement read. “All aspects of bilateral relations will be discussed and an exchange of views on regional issues will take place during the meeting,” it added.


>> The net international investment position (IIP),  defined as the difference between Turkey’s external assets and liabilities, posted a USD 265bn deficit in November, compared to the end of 2021, when it posted a USD 255.8 bn deficit, according to the Central Bank.

>> The Residential Property Price Index (RPPI) jumped 174.3% in November, year-over-year, according to the Central Bank. The index increased by 3.8% on a monthly basis.

>> House sales dropped by 0.4% from 1.49 million units to 1.48 million units in 2022, compared to the previous year, according to the Turkish Statistical Institute (TurkStat).

>> The short-term external debt stock surged by 19.6% to USD 145.5bn in November 2022, compared to the end of 2021, according to the Central Bank.

>> The Treasury and Finance Ministry borrowed TRY 1.57bn in two auctions held yesterday.

>> The global debt stock hit a record high of TRY 300tr last year, according to a report prepared by S&P Global. The per capita income averaged USD 12,000 while debts reached USD 37,500 in the world in 2022.

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