What matters this morning

The National Defense Minister Hulusi Akar discussed bilateral security and regional issues with the U.S. Secretary of Defense Lloyd James Austin over the phone.

During the conversations Akar and Austin had ‘a positive exchange of views’ on regional matters and bilateral defense and security issues before the upcoming NATO Summit, the National Defense Ministry said on its official Twitter account.

A top-level meeting of NATO member states will be held on Monday in Brussels. The U.S. President Joe Biden and President Recep Tayyip Erdogan will meet on the sidelines of the NATO Summit. As our foreign affairs columnist, Professor Ilter Turan considers the meeting as “a tone-setter” in his article discussing the possible outcomes of the meeting for the coming issue of TR MONITOR. “I think what we will learn from it is whether forward progress is possible and to what extent. It’s only a start but starts are important in determining where relations will go from there,” he writes. We will be knowing more about the outcomes next week after the meeting, which is also important in terms of economic relations.

On the economic side, the annual inflation is estimated to fall to 15.5% this year and 12% next year, according to the international credit rating agency Fitch Ratings. Meanwhile, the interest rate is expected to see 17% at the end of 2021 and 13.5% at the end of 2022. The agency also estimates the country’s Gross Domestic Product (GDP) to surge by 6.7% in 2021 and 4.7% in 2022.

Looking at the money market with these developments, TRY appreciated after the U.S. inflation data was released and the interest rates of the U.S. Treasury bonds declined. USD/TRY, which dropped by around 2% yesterday, remains at 8.33 this morning. EUR/TRY keeps yesterday levels and hovers around 10.15-10.16.

Gold prices reached USD 1,900 once again after USD weakened and yields of the U.S. Treasury bonds declined. Spot gold is traded at USD 1,901 per ounce.

Oil prices are supported by expectations about vaccination speed and possible demand increase with the impact of summer months. Brent crude is traded at USD 72.60 this morning.


The Industrial Production Index surged by 66% in April, compared to the same month of the previous year, according to the Turkish Statistical Institute (TurkStat). The index fell by 0.9% on monthly basis.

The Total Turnover Index including manufacturing, construction, trade and services sectors increased by 96.9% in April, compared to the same month of the previous year, according to TurkStat. The index declined by 1.8% on monthly basis.

Retail sales volume increased by 41.7% while retail turnover rose by 63.3% in April, compared to the same month of the previous year, according to TurkStat. Retail sales volume and retail turnover dropped by 6.3% and 5.4% on monthly basis, respectively.

The Central Bank will release the results of Expectation Survey.

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