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Following the decision made by the Banking Regulatory and Supervision Agency, it was revealed that the Central Bank and public banks have been selling foreign currency at a level close to $ 3 billion.

According to the news of Şebnem Turhan of the daily Dünya, intense sales of currency were carried out by the central bank and public banks after the decision of the Banking Regulatory and Supervision Agency, which aims to stop the depreciation of the Turkish lira and reduce the loans, last Friday. Currency sales, which began Friday with the announcement of the decision and sought to meet individual and corporate demand this week, reached $ 2-3 billion, according to information obtained from banking sources. The Central Bank, on the other hand, announced data on the international net reserve for the week ending June 24 in the money and banking statistics. Net international reserves, as defined by the IMF, fell to the lowest level of the last 20 years with 7 billion and 380 million dollars in the week of June 17, and continued to remain at the lowest levels of the last 20 years with 7 billion and 531 million dollars in the week of June 24th. Analysts expect the loss of net international reserves to continue due to foreign exchange sales this week.

THE FIRST INDIVIDUAL DEMAND, THEN CORPORATE

After the dollar / TL closed the day at 17.39 lira in Turkish markets last Friday, the BRSA announced its decision to limit foreign currency assets for TL lending. The BRSA’s decision, announced by the BRSA to prevent the use of TL loans and the purchase of foreign currency, has been interpreted as meaning that companies whose foreign currency assets exceed the limit in the first place can lead to currency sales. foreign. While the Turkish markets were closed, the dollar / TL reacted sharply to this decision by dropping to 16.47 lire. The dollar / TL, which fell to 16.09 lire until the Turkish markets opened on Monday morning, rose to 16.40 lire after the opening of the markets due to intense individual demand. Bank sources said that until the announcement of the decision on Friday and the opening of the markets on Monday, public banks and the central bank were trading intensively in the low-volume market.

Banking sources, who said public foreign exchange sales continue due to individual demand approaching $ 1 billion on Monday, pointed out that corporate foreign exchange demand emerged as of Tuesday. Although banking sources interpreted this as surprising, they said the public also continued sales to meet this demand. Dollar / TL, on the other hand, has been moving between 16.09-16.73 lire for the whole week. The 16.09 lire, reached at the close of the Turkish markets, did not reappear at the opening of the markets. According to information provided by the sources, the amount of currency sold by the public until yesterday amounted to 2-3 billion dollars, as of Friday’s decision.

$ 150 million increase in net reserves

The Central Bank yesterday announced data for the week ending June 24. As a result, the Central Bank’s net international reserves as defined by the IMF increased by $ 150 million from the previous week and reached $ 7 billion 531 million. Reserves, which fell to their lowest level in 20 years at $ 7 billion 380 million in the week ending June 17, continued to hold at these levels last week.

WILL THE 40% LIMIT BE INCREASED TO 50%?

The Central Bank is trying to bolster its reserves with the KKM, redeem credits, sell 40 percent of export earnings to the Central Bank and trade agreements between countries. However, with foreign exchange intervention sales and currency sales to SOEs, especially BOTAŞ, reserves are dwindling. Bank sources said the BRSA’s FX activity limit for this latter TL loan was also adopted at the request of the Central Bank. It was pointed out that the Central Bank’s next step, which plans to sell foreign currency with this step, could be the obligation to sell 50 percent of its export earnings to the Central Bank, not 40 percent.

THE CENTER WILL DETERMINE THE VALUE OF THE BLOKE INSURANCE

The Central Bank will determine the value of the blocked securities that the banks will hold at the Central Bank. An amendment was made to the press release dated 10 June which regulates the conditions for the establishment of securities in Turkish lira for liabilities denominated in foreign currencies. The amended press release provides banks with a specific target based on the conversion rate into currency-protected deposits. For those who have not respected this objective, it has led to the obligation to establish the titles as blocked. Consequently, the value of the securities which banks will hold in blocked accounts with the Central Bank will be determined by the Central Bank.

THE KKM ACCOUNTS EXCEED 1 BILLION LIRA

According to weekly data from the Banking Regulatory and Supervision Agency (BDDK), protected deposits in foreign currencies rose to 1 trillion and 18 billion lire in the week ending 24 June. According to BRSA data, the credit volume of the banking sector increased by 40 billion Lire 664 million last week and reached Lire 6 trillion 344 billion 453 million Lire. Last week, total deposits in the banking sector (including the interbank sector) increased by 26 billion and 847 million lire.

Total deposits in the banking sector, which increased by 0.4 per cent in the week in question, became 7 trillion 7 billion 981 million lire. According to the data, the amount of consumer loans increased by 9 billion 830 million lire as of 24 June and reached 905 billion 932 million lire. 345 billion Lire 238 million of these loans consisted of home loans, Lire 23 billion 308 million from vehicles and Lire 537 billion 387 million from consumer loans. In the aforementioned period the amount of commercial installment loans increased by 2 billion 315 million lire and reached 843 billion 302 million lire. Loans to personal credit cards of banks increased by 3.0 per cent to 276 billion and 759 million lire. 115 billion 276 million lire of receivables from personal credit cards were in installments, 161 billion 482 million lire were without installments. According to the weekly data of the BRSA, non-performing loans in the banking sector decreased by 2 billion and 310 million lire compared to the previous week and fell to 160 billion and 510 million lire on 24 June. A special provision was set aside for TL 128 billion 992 million of the aforementioned bad loans.

FOCUS ON STRENGTHENING RESERVES

The summary of the meeting was published yesterday, in which the Monetary Policy Committee (PPK) decided to keep the policy rate constant last week. While in summary it was stated that the share of sustainable components in the composition of growth has increased, the risks deriving from energy prices continued as well as the improvement in the current account balance linked to tourism, the following points were noted: important for the price stability that the current account balance becomes permanent at sustainable levels. In the observed increase in inflation; The increases in energy costs caused by geopolitical developments, the temporary effects of price formations that deviate from economic fundamentals, the severe negative supply shocks caused by the increases in global prices of energy, food and agricultural commodities continue to be influential. A comprehensive process of reviewing the policy framework continues, encouraging permanent and reinforced liralization across all policy instruments of CBRT. In this process, the focus will be on the development of policy tools to support the development of Turkish lira deposits, on the increase of the assets denominated in Turkish lira in the guarantee structure of OMO loans, on the gradual reduction of the amount of currency swaps and on the strengthening of foreign exchange reserves.

“THE LOCAL MIND IS IN EXCHANGE WHEN SELLING FOREIGN TL SECURITIES”

The outflow of foreign investors from TL stocks also continued last week. According to the Central Bank’s weekly securities statistics, foreign investors sold $ 98.4 million worth of shares and $ 57.7 million of national government debt in the week of June 24. While foreign investors have made sales and left, they have also increased the foreign currency deposits of domestic residents. According to the Central Bank’s weekly money and banking statistics, foreign currency deposits increased by $ 769 million, adjusted for the parity effect. In the week ending June 24, the beginning of the year, $ 3 billion 317.5 million in shares and $ 1 billion 741.7 million in government bonds reached $ 5 billion 59 million. Domestic residents’ foreign currency deposits increased both individually and company-wide in the week ending June 24. While individuals ‘foreign currency deposits increased by $ 78 million adjusted for parity, corporations’ foreign currency deposits increased by $ 691 million prior to the BRSA’s new move.

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