SHAFAQNA TURKEY. While there is no internal data to watch on the market today, we are monitoring developments around the May 14th election due to the changes it could bring to the economy.
In markets where the interest rate will find a balance, the balance of currency protected deposit accounts (CCM) is monitored, where the upper interest limits have been removed, and the repayment period in some areas has been reduced to one month.
In addition, meetings of foreign investors with the authorities and the opposition before the elections are monitored.
While there is a target of 60% Turkish Lira deposits in the banking sector, banks that fail to meet this target have obligations to hold bonds. While deposit rates exceed 30% on large transactions, CBR data show that the average deposit rate is close to its 20-year high, although still below inflation.
In policy, the direction of the exchange rate, credit, deposit, and treasury bonds is determined by the public. Economic management defines this process in the exchange rate policy as “stable TL”. However, since exporters have lost their competitiveness, they are demanding a new devaluation of the Turkish lira from the population.
Increases interest in foreign exchange
Growing opinions that the dollar/Turkish lira price is lower than it should have been before the elections and that the Turkish lira should depreciate is boosting interest in foreign currencies.
Bankers predict that all recent moves, including KCM, have a common goal – to reduce demand for foreign currency, and that such moves may continue until the election.
On the other hand, yesterday’s foreign trade data also showed an increase in demand for import consumption. Imports of consumer goods increased in the first quarter by 66% compared to the previous year and reached $10.2 billion.
While the trade deficit widened 31.5% to approach $35 billion in the first quarter, energy imports, the main source of the deficit, fell significantly from the previous month.
In March, energy imports decreased by 28.6% compared to the same period last year and amounted to $6 billion. Taking into account 12-month energy imports, it amounted to $93.1 billion, which is $2.4 billion less than in the previous month. This was the first drop after a sharp increase in energy imports, which hit a historic high of $96.5 billion.
Bond prices hold profits
While signs of a slowdown in the US labor market added to investors’ fears about the course of the economy, stock markets struggled to determine direction today, the dollar failed to make up for losses, and bond prices maintained their growth.
The dollar index, which measures the dollar against six major currencies, hit a new two-month low at 101.43 today after falling 0.5% yesterday. WORLD
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