Browsing: Interest Rates

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Turkey Inflation: A Year with A Bad Ending

‘Hate to Say I Told You So’ was one of the most iconic songs in early 2000s, performed by the band called The Hives. Now the phrase also reflects my views on the evolution of Turkey’s price stability indicators this year. In line with my…

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A Brief History of Monetary Orthodoxy in Turkey

Since late 2010, the Central Bank of Turkey has been employing unconventional monetary policy tools primarily for price stability, and creating an environment conducive for economic development. It is hard to tell the reserve bank has succeeded in the former, and Turkey’s track record of…

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Mortgage Boom in the Making

Construction sector has maintained a significant role for Turkish economy in recent years as house prices in mega cities have skyrocketed and government sponsored large projects have been under way. Now with the economy sending signals of slowdown, we not surprisingly saw some attempts to…

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February Inflation: Simply Backtracking

Having lived up to all the hype, Turkey’s February headline inflation printed a double-digit figure. Moreover, further upside movement should be expected as core indicators, the negative base effect of food prices, and most importantly, producer price index that is hanging around its record highs…

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Turkish Lira: Liquidity Challenges Ahead

Declining volumes in currency trading has been an overriding theme as banks have been subject to stricter regulations on their trading activities. It is early to talk about the recent Trumpflation trade has caused any change globally, but when it comes to trading Turkish lira…

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Monetary Confusion and Credit Cycles

Turkey has been an interesting experience for economists in many aspects. A central bank keeping the real interest rates extremely low in a period when the country suffers from savings gap and high inflation may be among them, despite a good economic performance. Pretending that…

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Q1 2016 GDP Growth: Stronger but Iffy

Turkish economy grew by 4.8% in Q1 2015, above the consensus and our expectations of 4.4%. In seasonally adjusted terms, the economy expanded by 3% q/q. Household consumption expenditures, which generates two thirds of the GDP, continued to improve and posted a growth rate of…

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April Inflation: Slows to 3-Year Low

April inflation was another negative surprise and the drop was sharper than expected for the second month in succession. The reading of 0.78% dragged the annual rate down to 6.6%, primarily due to decreasing food prices. With that being said, it is worth to note…

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Turkey: Any Room for Loan Growth?

Turkish central bank cut its overnight marginal funding rates by 75 basis points in the past two monetary policy meetings in an effort to simplify its interest rate structure as the volatility in global financial markets eases. The rate cuts came amid criticism by the…

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Iran: Deserves A Closer Look

After seven years of international sanctions, Iran is once again open for business. The end of sanctions is a lifesaver for the economy as billions of dollars’ worth of frozen Iranian assets were released. In addition, years of isolation and a lack of investment have…

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Turkish Central Bank Lost It?

Since 2006 Turkish central bank has officially been in pursuance of price stability after reforms such as law amendments regarding the formation of the bank differ the way the bank function. Until 2009, the bank irrefutably had been on the path to achieve price stability.…

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Core Inflation Heats Up

As expected yearly inflation fell in October as temporarily weaker food and energy prices more than offset the impact of the foreign exchange pass through (1.5% m/m, 7.6% y/y). The figures seemed to be slightly above the estimates. The upward surprise was on the back…

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