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 the central bank is the only game in town is inherited by the world of quantitative easing, where developing economies are besotted with a cheap money which has been in place for...
October Inflation: The End of the Line
Headline inflation in October came out at 1.44% m/m pointing to an annual inflation rate of 7.16%, fell behind the expectations of 1.58% but slightly higher than our estimate of 1.40%. Meanwhile downward trend in core indicators continued, as I-index y/y change declined 7.04% in October and from 7.69% in September. In our view, October reading was another relief provided to the central bank on the inflation front, however, we do not think that clear skies are ahead.
Turkish Banks: Differentiating Rapidly
At a time when some argue that Turkey is on a path to being more state-sponsored economy owing to the Treasury guaranteeing large scale projects, the performance comparison of public and private banks gains importance. Thus, we aim to compare both groups in terms of lending growth, funding capacity, capital adequacy, and liquidity position in order provide some insights.
Loan GrowthPublic commercial banks have been outperforming the private peers in lending growth since May 2013...