This blog post outlines recent changes in rediscount credit utilization and introduces the exporter scoring that will come into effect on January 13, 2025.
This blog post examines the impact of external demand conditions and market share developments on Türkiye’s exports to the European Union, Türkiye's largest export market, by sector, using Eurostat’s monthly international trade data.
In this blog post, we analyze Türkiye’s exports to the European Union, our main trading partner, and summarize our findings on the determinants of exports.
This blog post explores the breakdown of personal credit card balances at a granular level. Results reveal that the majority of card users have low debt balance, and the total balance is concentrated on a small number of card users with large debt balances.
Halil İbrahim Aydın,Mehmet Selman Çolak,Yavuz Kılıç
In this blog post, we analyze the real increase in card balances and find that it is largely driven by individuals' tendencies to use cards instead of cash as a means of payment.
In this blog post, we analyze the underlying trend of economic activity in the first half of the year in terms of expenditures and production, based on national income data.
In this blog post, we analyze the relation between the growth in FX deposits and the reduction in the FX-protected deposit balances in light of data, and interpret this relationship in the context of savers’ currency preferences.
This blog post closely examines the effects of the implementation regarding export proceeds sales to the CBRT, which entered into force on January 3, 2022, and of the subsequent revisions to that policy on firms' FX repurchase behavior and the FX market.
With the July 2024 publication, the The Central Bank of the Republic of Türkiye changed the method of calculating the Residential Property Price Index so as to provide the public monthly price changes in a way that provides more timely information. In this blog post, we summarize the scope of the revision as well as its effects on the indices.
Following a decline after 2018, foreign exchange loans have recently assumed an upward trend. Subsequent to this uptick, the Central Bank of the Republic of Türkiye took additional tightening steps in support of the tight monetary policy. This study examines the dynamics of the recent increase in foreign exchange loans and analyzes the developments in loan maturities in view of supply/demand-side factors.
Özgül Atılgan Ayanoğlu,Kübra Yıldız Özertaş,Ünal Seven
The Central Bank of the Republic of Türkiye has started to publish the Sectoral Inflation Expectations, consolidating the 12-month-ahead inflation expectations of a range of economic actors. This blog post examines the methodology of the Sectoral Inflation Expectations publication as well as the inflation expectations shared with the public.
During periods of monetary tightening, rebalancing of domestic demand is expected to positively affect the foreign trade balance and the current account balance. The latest monetary tightening cycle, which began in June 2023, affects various macroeconomic indicators besides inflation, including foreign trade and the current account balance. In this blog post, we provide a descriptive analysis of the effects of the recent monetary tightening on Türkiye’s foreign trade and current account balance.
Ahmet Bilal Kurtoğlu,Furkan Höçük,Ömer Batuhan Beşirli
Central banks, by virtue of the duties and powers vested in them by law, operate within a framework that, unlike that of commercial banks, pursues the public interest and does not seek to make a profit. Periodic loss announcements by central banks during extraordinary times are temporary and exceptional, as the literature points out, and thus do not serve as an indicator for assessing the effectiveness of monetary policy.
The Central Bank of the Republic of Türkiye started to publish the Commercial Property Price Index (CPPI) on 26 February 2024. This blog post provides information on the calculation method and results of the CPPI measured for Türkiye, Istanbul, Ankara and Izmir.
This blog post discusses the option value of the KKM as well as the factors determining savers’ preferences between the KKM and TL deposits. It also presents an evaluation of the impact of the CBRT’s steps to strengthen TL deposits from an investor perspective, and reveals that increasing the relative attractiveness of TL deposits has stimulated a decline in KKM balances.
This blog post analyzes the impacts of the regulations announced on 20 August 2023 on deposit rates. The results of the analysis suggest that the regulation introduced on August 20 has promoted the conversion of FX-protected deposits to Turkish lira deposits, thereby supporting macro financial stability, the monetary transmission mechanism, and the monetary tightening process that started in June.
According to the impact analysis, presented here in summary form, the conversion process from DDM deposits to Turkish lira accounts has not created an additional demand for FX. Moreover, after the regulations, the likelihood of firms with maturing accounts becoming net FX buyers has significantly decreased.
Firms in Organized Industrial Zones (OIZs) deliver a better economic performance than other firms. OIZs are in a key position in terms of efficiency of targeted industrial and targeted financing policies through clustering.
If the cyclical effects ease and particularly, if global commodity prices converge to their long-term trends, the deficit observed in the headline current account balance may decrease significantly and even post a surplus.
The liraization strategy lays out a comprehensive policy framework that has been continuously improved to ensure that the Turkish economy achieves permanent price and financial stability.
Serdar Erkılıç,Hakan Hüsnü Toprak,Eda Altuntaş Dursun,Yahya Kocakale
This study gives a brief account of the scope and impact of the revisions to the statistics of Short Term External Debt, International Investment Position (IIP), Foreign Exchange Assets and Liabilities of Non-Financial Companies and Weekly Securities disseminated by the Central Bank of the Republic Turkey on 19 August 2021.
This blog post evaluates the results of the Cash Usage Habits Survey conducted by the Central Bank of the Republic of Türkiye in September-October 2020 to understand the cash usage habits in our country and to examine the importance of cash in payment methods.
In this study, we summarize our findings regarding the exporting potential of firms included in the Central Bank of the Republic of Turkey Sectoral Balance Sheet data-set, and the sector, size and provincial breakdown of non-exporting firms with high potential.
This blog post gives a summary of the pandemic-related decisions taken by manufacturing industry companies traded on the BIST and presents the findings about how the pandemic has affected sectors.
Permanent price stability will protect people who believe and trust in our economy, restore the prestige of our currency, and, hence, help us face the future with confidence.
In this blog post, we classify the firms with the highest level of productivity as frontier firms and investigate the characteristics that distinguish these firms from other firms in terms of employment structure
Turkey opened new embassies in 39 countries between 2008 and 2016. This blog post analyzes the impact of this expansion on Turkey’s foreign trade with the relevant countries
Mustafa Akay,Doruk Küçüksaraç,Muhammed Hasan Yılmaz
FX derivatives are broadly used to reduce corporates’ exchange rate risk in emerging market economies. However, firms exhibit heterogeneity in terms of the use of derivatives. It will be beneficial to take this fact into account while designing regulations to encourage hedging.
The ITS statistics introduced by TurkStat are based on comprehensive micro-databases comprising administrative records and firms’ direct reporting. These statistics provide information at international standards in a breakdown by type of services and country.
This article presents an evaluation of how a monetary policy framework can be drawn up in line with the price stability and financial stability objectives in the light of the findings of academic literature and discusses how emerging markets may differ from advanced markets.
The real exchange rate has a larger impact on imports than on exports, whereas aggregate demand is more likely to determine imports. Compared to previous periods, the effect of real exchange rate was more pronounced in the recent improvement of the external balance.
Importance of policies that aim to broaden the funding options such as deepening of capital markets, and venture and risk capital is revealed in this study.
Turkey moved up to rank 33 from rank 43 in the World Bank’s 2020 Ease of Doing Business Ranking, making significant progress by leaping 10 ranks at once.
The existence of vacant jobs is an indicator of an important growth potential for economies. However, challenges in filling vacancies may restrain this potential. This blog post examines characteristics of these firms by using the Labor Market Surveys of the Turkish Employment Agency.
Knowing how much imported input is used during production by export companies is important with respect to better understanding the prospective impacts of exchange rate fluctuations on exports and the general economy. In recent study, we tried to measure imported input dependence of Turkey's exports using micro-level data.
The indicator to be employed to set the buffer ratio should measure the sectoral stress accurately, be applicable at an international scale, and be simple, clear and rule-based, as those qualities are directly connected to the effectiveness and credibility of the CCyB.
The consistency of the productive capacity revealed in the form of foreign trade performance with the sectoral real effective exchange rate supports the interpretation of the decline in real effective exchange rate indices as competitive advantages. On the other hand, the strong medium-term relation between sectoral real effective exchange rate series and productivity points to the potential importance of productivity in the translation of nominal exchange rate advantages into international competitive advantages.
Having joined the World Trade Organization (WTO) in 2001, China integrated rapidly into the world economy and grew to become a key player to have direct implications for many economies through trade and finance. This natural influence of the world’s greatest exporter and second largest importer comes up in changing ways over time.
Venture capital and angel investment channels are particularly important instruments to boost direct investments of foreign investors in Turkey through international networks. Expansion of these methods is important in terms of their contribution to financial intermediation and their potential in providing high quality external financing.
Our empirical analyses show that macroeconomic fundamentals become more important for country risk premium for emerging economies particularly when the global risk appetite is not accommodative.
The Fed started its balance sheet reduction program in the last quarter of 2017 and publicly announced its pace as well as its method. However, it did not make any commitment on the extent and deadline of this reduction. Following the recent slowdown in global growth, the Fed also suspended its policy normalization and announced that it would end the balance sheet reduction in September 2019 accordingly.In this note, we summarize that framework and evaluate its implications in terms of the balance sheet normalization.
The country of origin and the profile of inbound tourists as well as data on spending items that generate tourism revenue are key to analyzing tourism trends, identifying a target market and proposing better policies.
The female labor participation rate in Turkey has increased considerably in recent years and the determinants of this increase are analyzed in this study.
When the exchange rate effect is ignored, the fluctuation in the money supply may seem larger than it actually is in periods of substantial changes in exchange rates, producing misleading signals. Monitoring high-frequency money supply developments in both exchange rate-adjusted and non-exchange-rate-adjusted terms may be a better idea in economies with a high share of FX deposits in the money supply.
Approximately 6.1 billion TL worth of savings have been brought into the economy since the second quarter of 2016 as a result of policies towards increasing savings. Of this amount, 4.6 billion TL came from AES, 1.3 billion TL from gold-backed securities investments, and 175 million TL from housing and dowry accounts.
The aim of this study is to evaluate the supply-demand balance in the housing sector. The supply-demand balance gives us information about the stock buildup in the housing sector.
A considerable proportion of wage and salary employees in Turkey earn wages at and around the minimum wage, and minimum wage rates and the CPI serve as an anchor for wage increases in the private sector. This mechanism limits the sensitivity of wages to business cycles across the economy, leading to a significant rigidity in wage inflation and feeding into inflation rigidity in terms of the interaction between wages and inflation.
There is a noticeable extension in maturities of TL deposits since September. In the current financial setting, which has seen favorable implications of fading uncertainties and a macroeconomic rebalancing, the tax regulation made vis-à-vis withholding rates has contributed to the extension of deposit maturities as well as to curbing the dollarization.
The findings of our study underline that the conjunctural and structural policy framework to be developed to anchor inflation expectations is important in terms of lowering the borrowing costs and enhancing the effectiveness of monetary policy in emerging market countries.
As the weight of age groups with different economic behavior in the total population changes, so does the total production and spending levels, hence the course of inflation. In this context, one of our findings is that the disinflationary effect of demography in developing countries will decrease gradually in the upcoming years. However, the figures we calculated for Turkey indicate that this change will not reach a level that may play a decisive role on inflation dynamics in the very near future.
Although different financial stress periods have distinctive dynamics, the historical course of external debt rollover ratio can act as a reference in assessing the current situation.
In this blog post, we will examine the relationship between domestic sales and exports of manufacturing firms and how much this relationship is affected by domestic demand conditions. The results showed a pattern of substitution between domestic sales and exports of manufacturing firms.
Considering the recent fluctuations in portfolio flows, it is critically important to monitor and understand the changing behavior of global portfolio investors towards EMEs.
The project-based incentives program, designed to promote investments in upper-medium and advanced technology, is intended to reduce the current account deficit in the medium to long term.
Flexibility in labor markets should be handled with pros and cons. Even if low costs incurred by firms when meeting the labor demand from the free market is preferable in terms of the economy’s resilience against shocks, the cumulative effect to stem from rapid lay-offs on the economy should also be taken into consideration.
In this blog post, we aim to examine the domestic debt instrument preferences of investors in Turkey and compare them with some selected countries. Cross-country comparisons reveal that non-resident investors prefer long-term fixed-rate debt instruments. However, instrument preferences of other investors of the domestic debt stock vary across countries.
It is possible to say that the new tax law will stimulate US domestic demand and promote economic growth in the short run. Its medium and long-term impact will be determined by the supply-side effects.
Mehmet Zahid Samancıoğlu,Seyit Mümin Cilasun,Fatih Yılmaz
Firm investment rates have recently diverged in Turkey. Incentive policies should be designed in such a way as to aim for mechanization, particularly R&D-backed and high tech-based mechanization, in manufacturing industry in the long run, by taking into account differences in the breakdown of investments.
Industrial metal prices are determined by supply and demand factors in the medium and long term while financial conditions and the risk appetite have a decisive role in metal price movements in the short term.
Abdullah Kazdal,Süleyman Kutalmış Özcan,Muhammed Hasan Yılmaz
Product, activity and country-based diversification in the Turkish foreign trade witnessed a significant upswing in the last 15 years. On the other hand, diversification has come to a halt in recent years. In this context, steps to be taken to improve diversification in exports are considered vital.
Turkey has recently achieved significant progress in the field of credit reporting. However, despite its magnitude, this progress falls short of contributing to financial inclusion.
Household indebtedness in Turkey is lower than in peer countries. However, it is of critical importance for a balanced growth that factors such as the propensity to save, financial stability, current account balance, and changes in the general price level are taken into account when managing this process.
With its labor quality, consumption pattern, demand power, technology skills, geographical location, infrastructure, business routine, and incentives, Turkey is a good alternative for both market-seeking and efficiency-seeking FDIs.
Yusuf Emre Akgündüz,Yusuf Kenan Bağır,Huzeyfe Torun,Altan Aldan
Recently, productivity gains have continued, while real wages have registered a decline. The impact of the changes in composition of employment and production structure is limited in these developments. The surge in productivity in the industrial sector is a favorable sign for inflation and growth dynamics.
The share of renewable energy in total supply was up around 12 percent from 2005 across the world in 2016. Turkey has a higher rate of renewable energy use than the OECD average but the rate of increase has proved far from satisfying.
Total portfolio inflows to emerging market economies are likely to decelerate in the upcoming period due to the Fed’s policy tightening. However, it appears that country-specific dynamics will be decisive in finding out who will get a larger share from the pie.
The length of time for return on housing investments in Turkey increased until mid-2016 after which this trend reversed in line with the downtrend in house values.
By being simple, transparent and easily accessible, prices on futures markets generally serve as a good starting point for forecasting oil prices, yet it is safe to say that forecasts made using a proper combination of different methods give more reasonable results.
Turkish manufacturing sector frontiers in terms of productivity are generally export-oriented large-scale firms with high turnover. These firms invest in technology and R&D. Laggards increase their productivity by learning from regional and national frontiers and/or by adapting the frontiers’ technologies according to their needs.
The pricing dynamics of core goods and services groups – the two main components of core inflation – are very different. For a sound analysis of core inflation, we should hear the tales of these two groups individually.
While a substantial number of firms had access to finance with the expansion of the Credit Guarantee Fund (KGF) facility, the majority of KGF guaranteed loans were used by corporates that were already borrowers of bank loans. Moreover, findings suggest that the KGF guarantee had significant implications in terms of credit costs and extension of maturities.
In 2017, banks expanded their deposit base on the one hand and used alternative funding sources on the other. In the upcoming period, continued diversification of funding sources will contribute to both financial deepening and the decline in funding costs.
The recent historically low level of the deviation index is a positive indicator of the effectiveness and predictability of monetary policy implementations.
Derivatives are not new to Turkish firms. They are already actively using derivative transactions, primarily swap, forwards and options. Moreover, the cost of forwards that are used by the corporate sector in managing the exchange rate risk is akin to banks’ costs.
The cost of raising the inflation target would most probably override its benefits. Moreover, although the likelihood of advanced country central banks hitting the zero lower bound problem is high, it will not be easy for them to abandon this policy that they have built up over a long time.
Oğuzhan Çepni,Doruk Küçüksaraç,Muhammed Hasan Yılmaz
The results of our analysis demonstrate that low government debt and adequate foreign exchange reserves positively affect the perception of sovereign risk in financial markets. In this respect, recent policy steps towards effective use of reserves are thought to be beneficial.
Projections based on World Trade Organization (WTO) data suggest that the uptrend in world trade volume will remain strong in 2018 and Turkey’s foreign trade partners will show a better growth performance than they did in 2017. These projections indicate that the momentum achieved in Turkey’s exports in 2017 will be sustained in 2018.
The Markets in Financial Instruments Directive II (MiFID II), which took effect on 3 January 2018, is intended to foster integration between EU financial markets, strengthen investor protection and improve transparency for all market players.
Our findings suggest that rediscount credits support exports. Yet, it should be underlined that a number of factors should be taken into account in the design of such financing instruments and the funds should be distributed in a target-oriented and efficient way.
F. Pınar Erdem Küçükbıçakcı,Etkin Özen,İbrahim Ünalmış
Our findings indicate that the effectiveness of macroprudential policy tools depends on the phase of the credit cycle, i.e. whether credit growth is accelerating or decelerating.
The Data Gaps Initiative has made a significant contribution to countries in collecting and disseminating comparable, consistent and timely statistics. As for Turkey, there have been significant improvements in the statistics produced within the scope of the Initiative with respect to timing and content, and new statistics, such as sectoral accounts and real estate price indices, have started to be compiled and produced that will facilitate monitoring economic activity in Turkey.
The findings reveal that exchange rates affect inflation not only through the cost channel but also through expectations, type of financing, market structure, etc.
It seems hard to decide whether the use of imported inputs is at an optimum by merely looking at figures or making cross-country comparisons. However, if we evaluate the use of imported inputs in a breakdown by sectors and in light of its change over time, the existence of some structural problems can be seen clearly.
In Turkey, there is a strong correlation between tax revenues and economic activity. Tax revenues decrease in periods of economic contraction and increase in periods of economic expansion.
There appears to be a correlation between the developments in the firms’ default probabilities calculated by the option pricing model and the NPL ratios. Therefore, it is considered that it may be helpful to use the corporate sector default probabilities in credit risk analyses and in the studies to be carried out to monitor the asset quality of the banking sector.
The borrowing preferences of the corporate sector are important in terms of financial stability. It is obvious that the FX loan utilization by firms with no FX income is very risky. FX loan costs, which are supposed to be low, may significantly exceed the TL loan costs depending on exchange rate developments.
In this study, the MFA-score, which measures the firm’s financial soundness with a high predictive power, was developed by using the balance sheet data of the real sector firms quoted on the BIST. As a result of our analysis, we found that distressed firms have a small share in terms of asset size, meanwhile, the firm debt and FX open position mostly concentrate in firms that are financially sound.
Producer prices are an indicator for capturing cost-side pressures on consumer prices. but the difference between the rates of increase in these series grows in favor of producer prices during periods of import cost shocks. Accordingly, it is natural that there was a divergence between D-PPI and CPI in 2017 when oil prices and exchange rates displayed significant movements.
In addition to being a long-term financial instrument for a country, these investments are important since they encourage the use of new technologies in production instead of old ones and thus urge an increase in productivity and the opening up of companies to new external markets.
Uğur Namık Küçük,İbrahim Ethem Güney,Doruk Küçüksaraç
The TL-Settled Forward Foreign Exchange Auctions are expected to support the corporate sector’s exchange rate risk management capacity by facilitating access to a simple, deep and efficient hedging instrument.
All stakeholders led by commercial banks are expected to contribute to developing and proliferating gold-related financial instruments to ensure the success of the process.
“Shadow banking” activities, which have a relatively low share in Turkey’s financial markets, are closely monitored as they constitute a factor of vulnerability on a global scale.
Our findings suggest that measures taken to simplify the operational framework of monetary policy have significantly affected the liquidity management behaviors of banks.
The findings of our analyses suggest that seasons, days, feasts and wage payment periods cause significant fluctuations in the growth of currency in circulation.
Misconduct can be a severe factor of fragility for financial institutions. Misconduct that increases particularly in periods of accelerated financial innovations not only causes damage to institutions but also leads to systemic risks by triggering a confidence crisis that may spread through the whole system through the contagion effect.
A country’s, particularly emerging countries’, performance in improving its institutional structure will be decisive in the economy’s potential to grow and benefit from international trade, regardless of an increase or weakening in the trend of protectionism in the world economy.
In September 2016 Banking Regulation and Supervision Agency introduced some amendments to macroprudential policy regulations. These changes had a favorable impact on the growth rates of housing loans and general-purpose loans, which played an important role in the recovery in the annual growth rate of total retail loans in the last quarter of 2016.
Even if firms’ decisions about exports are stable, it can be asserted that crises can lead to some dramatic changes in export behaviors of firms. In this context, it is very important to take into account the peculiarities of the period while determining incentives and measures to be introduced during economic fluctuations.
Muhammed İslami Önal,Mehmet Büyükkara,Zeynep Özge Yetkin
The Turkish banking sector does not experience any problems in implementing Basel III regulations thanks to its high capital adequacy level, strong risk management, effective supervisory and internal control systems, robust equity structure, high level of liquidity, low leverage level and deposit-based funding structure.
We should keep in mind that the capital adequacy ratio, which moves downward due to exchange rate developments in the short term, can rebound owing to the rise in profitability in longer terms.
In addition to macroprudential policies implemented by policymakers in Turkey recently, the number of countries/banks that provide funds to the Turkish banking sector has also increased steadily, and regions outside the traditional financial centers have also become important sources of funds for the Turkish banking sector.
We assess that the growing transaction demand, the new bond issuances over the years and the maturity axis filled by the shifting maturities of previously issued bonds provide the adequate conditions necessary to form a healthy yield curve.
In Turkey, exogenous factors such as exchange rates and import prices have a significant impact on inflation. Estimates of pass-through from exchange rates and import prices to inflation allow us to make quite clear policy inferences as they contain no significant uncertainty. Nevertheless, pass-through from economic activity and wages to inflation contains a wider uncertainty band.
We observe that global liquidity has an impact on the magnitude of interest rate transmission. Yet, financial regulation is strengthened on a global scale and macroprudential policies are implemented in a broader spectrum, which may have weakened this impact.
The timely, targeted and temporary fiscal measures such as funding support and employment incentives have a high multiplier effect and a significant potential for creating tax revenues, which is expected to limit the impact of these measures on the budget deficit to some extent.
The Turkish Statistical Institution has recently made a revision in the national account system. Due to the revision, one of the most important differences between the series was in savings rates. However, the improvement observed in the savings rate in the aftermath of the national income revision does not eliminate the need for structural reforms in this area.
Supporting the measures and incentives with structural reforms oriented towards lasting productivity increases is of critical importance to achieving long-term gains in production capacity.
Due to Turkey’s prolonged EU membership process, which has lasted for over twenty years, and also due to a series of conjunctural and technical reasons, a need for an enhancement of the Customs Union has emerged in recent years.
Changes in the quality composition of exports affect domestic food prices. Quality management in fresh fruit-vegetable products may serve as an important tool in reducing the volatility in inflation.
Ensuring efficiency in post-production supply processes is as critical as boosting productivity for a healthy price formation in fresh fruit-vegetable products.
Banks’ long-term borrowing tendency has strengthened due to the measures introduced. The change in the maturity composition of external debts in favor of the long term increases the sector’s resilience to liquidity shocks and supports financial stability.
Ahmet Adnan Eken,Mehmet Kasım Tırpan,Neslihan Tuba Kavruk,Başak Erdoğan
A developed and efficient government domestic debt securities (GDDS) market attracts foreign investors to Turkey. Actually, while GDDS held by non-residents has increased over time, the GDDS portfolio of non-residents has become an important item within the financial account of the balance of payments.
The licensed warehousing system will underpin the healthy price formation in storable products by containing the persistent upward trend in food inflation.
The methodological change in the weight structure of seasonal products is likely to cause fluctuations in core inflation via clothing and footwear prices. Therefore, in order to be able to make a healthy evaluation of the underlying trend of inflation, it would be wise to take into account the indicators adjusted for these effects for 2017 as it is a transition year.
Real wages do not have a significant elasticity for the low-wage group which accounts for approximately 25 percent of the workers in the Turkish economy. As for workers who earn more than the minimum wage, real wages are relatively more elastic.
Samet Kütük,Yavuz Selim Hacıhasanoğlu,Mahir Binici
In Turkey, we can assert that credit market developments mostly coincide with economic activity. Moreover, we find that the divergence between the duration of business cycles and credit cycles is not as severe as in other countries.
The NEO is affected by the foreign exchange legislation that changes over time, domestic economic developments, the course of the global economy, and the expectations and related behaviors of economic agents.
The NSFR, which will be effective starting from 2018, will enable comprehensive measurement of the liquidity risk by taking into account the maturity of the assets and liabilities on banks’ balance sheets.
It can be asserted that improvement in highway quality decreases trade costs, increases trade volume between regions, and supports the functioning of the market economy by improving competitiveness.
The fact that the effectiveness of fiscal policy increases in low-growth periods enables the implementation of countercyclical expansionary fiscal policy without a lasting deterioration in fiscal discipline.
It is observed that central banks are willing to normalize their policies. Nevertheless, growth and employment developments worldwide, except for the USA, are not favorable enough to allow normalization at the moment.
When we need to make an economically meaningful deduction on the main trend of economic activity, we need to adopt an approach that excludes calendar effects from the variables.
Among the measures recently taken in emerging economies against the foreign currency exposure of the corporate sector, decisions by the central banks of India and Indonesia stand out.
Ali Hakan Kara,Fethi Öğünç,Çağrı Sarıkaya,Mustafa Utku Özmen
The degree of exchange rate pass-through to inflation may vary depending on the economic environment. Currently, the weak economic activity is limiting the exchange rate pass-through, whereas the behavior of exchange rate expectations pose upward risks.
The likelihood of a reversal in liberalization and integration processes driven by the EU and the US in the period ahead has started to be openly discussed on international platforms.
It is anticipated that trade in local currencies will have a significant potential and it is expected that its share in total trade will increase in the coming years
Concerns over NIR that was regarded as a life-saver at the beginning have increased. It is observed that some central banks are watching for an opportunity to exit this implementation.
Recently, the share of financing companies in household liabilities has increased owing to the moderate growth in bank loans and the opening of new financing companies.
Quality of food supply, compliance with health standards, sustainability of food supply, and the stable course of domestic food prices constitute the main pillars of the “food safety” issue.
Financial conditions, conceptually, summarizes whether financial indicators such as interest rates, exchange rates, asset prices and credit conditions are being restrictive or accommodative on economic activity.
Deposit maturities in Turkey are short and historically there has been a close relationship between the short term market rates –on which the CBRT has been decisive- and the Turkish lira deposit rates.
The Turkish lira liquidity demanded by banks from the Central Bank is determined according to the funding need of the system and the types of assets accepted as collateral for Turkish lira (TL) liquidity facilities of the CBRT do not determine the funding need of the system.
For Turkey, food prices are in a more critical position due to their high share in household consumption expenditures, as in the case of several emerging economies.
In particular, in rapidly growing economies like Turkey, vocational high school education plays a pivotal role in the training of qualified human resources.
A holistic approach incorporating joint efforts of all stakeholders in the disinflation process can ease the policy trade-offs and thus make a significant contribution to achievement of lasting price stability at lower costs.
The total debt of resident sectors in Turkey is mostly driven by internal debts and its ratio to GDP has been on the decline since the third quarter of 2015, remaining at low levels compared to the selected countries.
In times of an elevated exchange rate risk, the demand for currency increases due to the hedging motive, which leads to a surge in both the level and the volatility in the currency swap market and the spot market.
In a period marked by reduced uncertainties, an approach characterized by flexibility loses ground to one based on predictability, which in turn necessitates simplification of monetary policy.
The discrepancy between the impacts of vocational training programs in different countries and at different times suggests that the content and design of the program is crucial for its effectiveness.
Past experiences show that banks are able to roll over more than half of their external debt even in the most unfavorable economic and financial conditions.
Fluctuations in the prices of the food group that constitutes the bulk of the inflation basket can determine the level of inflation and inflation expectations in the short run.
