Despite the current account deficit resulting from high energy imports, Turkey’s economic policies based on negative real interest rates in TL continue to be concerned and effective policy measures on supply and demand will continue to be followed in the markets. foreign currency.
It will be followed by the Manufacturing Industry Purchasing Managers Index (PMI), one of the leading indicators on industrial production and economic growth, which will be published nationwide at 10:00 today. ITO’s July Istanbul Inflation Indicator will also be followed. Furthermore, the Minister of the Treasury and Finance Nureddin Nebati is expected to speak in Gaziantep before noon.
Inflation data, which ITO is accepted as a leading indicator, will be announced by TUIK on Monday.
According to the Reuters poll, the consumer price index (CPI) is expected to continue its strong rise in June as well, climbing about 5 points to 78.35%, the highest in nearly 24 years.
THE DEMAND FOR FOREIGN EXCHANGES IS GROWING
The fact that the CBRT maintains the policy rate at 14 percent despite inflation exceeding 70 percent, or the very high negative return of the TL, increases the demand for foreign currency.
The direction of the economy is taking steps to reduce the demand for foreign exchange and increase the demand for TL with regulatory changes. Finally, although TL gained after the BRSA measures on Friday, experts predict that the depreciation will continue as foreign exchange demand continues.
According to data released yesterday, CBRT’s international net foreign exchange reserves have not moved away from the lowest level of the last 20 years, with a modest increase of $ 7.53 billion. According to calculations, CBRT reserves net of swaps hovered around $ -53 billion last week.
Although CBRT adds some of the exporter’s FX revenue and the FX portion of the KKM application to its reserves, the bank’s reserves do not increase at the same rate. The difference is in the currency with the government definition “stability” used for.
After seeing a new high of 17.5425 last week from December 20, the dollar / TL rose to the levels of 16.60 where it had been trading in the first week of June, after falling to 16.03 on the first day of the year. week.
STRONG INCREASE IN CDS
Thus, TL ended the first half with a 21% depreciation, while dollar / TL started the first trading day of the second half at 16.6800 / 16.7090.
Turkey’s five-year CDS record, surpassing 840 basis points (bps) in the middle of this month, rose sharply in the second half of this week after a gradual decline last week. CDS rose 6 bp yesterday, closing at 839/856 bp.
Looking at global markets, many markets were hurt in the first half, due to the tightening of policies of almost all countries except Japan due to rising inflation, and therefore fears that economies, which are the engine of global growth, they would go into recession.
According to Deutsche Bank forecasts, the US S&P 500 Index has left behind the January-June period of its sharpest decline since 1970, while US Treasury yields have seen the fastest rise in more than two centuries in the past. six months.
Experts say investors want clarity on the medium-term outlook for inflation, growth and monetary policies, but this is not expected in the short term.
While international bond yields started on the first day of the second half of the year with a rise, the dollar continued to rise, while Asian equity markets remained flat.