Levent Yilmaz – Yeni Shafak
The Monetary Policy Committee of the Central Bank issued its decision related to the interest rate, and this decision, which we were eagerly awaiting, came contrary to expectations. After expectations indicated an increase of 500 basis points, the decision came – as I mentioned in my previous article – to increase the interest rate by 250 basis points. The MPC also raised the one-week repo auction rate from 15% to 0.17.5%.
As is the case in every meeting, there were other decisions that were no less important than the decision to increase the interest rate rate issued by the Board, and now I will try to summarize these decisions and highlight their impact on the markets: First, we note that the process of gradual monetary tightening that the Board of Directors announced “starting” at the previous meeting “will continue” as of this meeting, in other words, we will witness a rise in the interest rate at the next meeting, and it is important to try to estimate the rate of increase before this meeting.
The Board noted that the increase in the minimum wage and the increase in salaries of employees will increase inflation through demand, and it is expected that the increase in the exchange rate and the recent decisions related to taxes will also lead to an increase in inflation due to the high cost of production.
On the other hand, the decision “to continue to support the Central Bank of Turkey to support strategic investments that will improve the balance of the current account” was canceled, and to stress that the balance in the current account will be achieved by supporting “foreign direct investments, the remarkable improvement in external financing, and the continuous increase in reserves and tourism revenues,” so that it can be said that the agreements concluded during Erdogan’s recent visit to the Gulf were effective.
After this decision, the Minister of Treasury and Finance, “Muhammad Simsek,” posted on Twitter: “We will direct the resources we obtained from abroad to exports and investments,” indicating that support will be provided.
extra in this area. In light of the new decisions, the Central Bank increased the daily limit of credit banks rediscount for exporters from 300 million Turkish liras to 1.5 billion liras.
Turkey, which in turn will provide support for export financing.
Looking at the text of the decision, an important thing can also be noted, which is that the simplification will continue in the partial and total precautionary decisions that were previously taken. This month, the reserve ratio for “protected deposit” accounts was increased to 15% to limit the continued increase in liquidity in banks recently, but this step may lead to a reduction in interest in “protected deposit” accounts, and thus the desire for these accounts will decrease and the demand for foreign currencies will increase.
In short, it is very unlikely that we will see facilitation steps in the near future that the market is looking forward to with regard to obtaining loans, and it should also be noted that the interest rate increase
It will continue to increase loan costs. According to the latest data, the growth of commercial loans decreased in the last 13 weeks, on an annual basis, by 6.9%.
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2023-07-23 13:38:23
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