Browsing: Turkish Lira

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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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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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Inflation Risk Rises As Lira Falters

There is substantial uncertainty stemming from several factors pressuring the core indicators, both to the upside and downside. On one hand, we have slowing economic activity with faster than expected rise in unemployment is easing inflationary pressures. On the other hand, TRY depreciating trend which…

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The Real Effects of External Debt on Turkey

One basic problem of Turkish economy is that the large current account deficit which is expected to equal to 4.5% of total Gross Domestic Product at the end of this year. When this is the case, the short term capital inflows and foreign direct investments…

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The Limits of Rationality in Monetary Policy

When your search for “central bank government pressure” on Google, the top three results are related to Turkey just hours before the monetary policy committee meeting to take place. Central bank independence has been one of the most important policies imposed by the International Monetary…

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Midnight Express

Of course I am not here to talk about the Academy Award winning movie although it has some detail that many Turks find ugly. Our monetary policy markets decided to hold an extraordinary meeting yesterday and it has seemed to have the desired effect so…

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CBT Unorthodoxy Reaches For Final Point

The Central Bank of Turkey held its monthly rate setting meeting yesterday and remained all interest rates unchanged as expected but made some technical adjustments such as canceling the monthly repo auctions. The policy rate remained unchanged at 4,50%, while o/n rate at 7,75%, and…

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Trend of Deposit Does Not Look Pretty

The recent trend of FX deposits does not look pretty at all as well as acts as reminiscent of 2001’s financial crisis in Turkey. The chart above shows the clear picture of both TRY and FX deposits are heading into. As demonstrated above, the terrifying…

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